By Yasin Ebrahim
Investing.com – The S&P 500 climbed Thursday as chip stocks led a broad-based rally in tech and the strongest jobless claims report in decades pointed to underlying strength in the economy.
S&P 500 rose 0.9%, the Dow Jones Industrial Average gained 0.7%, or 244 points, the Nasdaq rose 1.2%.
Chip stocks jumped more than 4%, led by Intel (NASDAQ:INTC) and NVIDIA (NASDAQ:NVDA) after the latter's chief executive Jensen Huang said the company would be interesting in using Intel to source its chips.
Some on Wall Street are skeptical, pointing out that Nvidia is unlikely to risk its competitive edge by allowing a rival to produce its chips.
“[W]e see little likelihood that NVDA would choose to fab prominent products at arguably its most significant competitor's facilities, a choice that would provide Intel with an early look at NVDA's future chip design,” Wedbush said in a note.
The broader tech sector was also helped by ongoing strength in Meta Platforms Inc (NASDAQ:FB) after the social media giant confirmed plans to build a hyperscale data center in the north Kansas City area.
Sentiment on risk assets was also supported by data pointing to economic strength as jobless claims fell to its lowest level since 1989.
“It [the labor market] is extremely strong and this data is exactly the sort of evidence that has given the Fed confidence that they can raise rates more quickly to battle inflation,” Jefferies said in a note.
Durable goods orders, however, fell by a more than expected 2.2% last month, though economists were quick to downplay the weakness, estimating a rebound was likely ahead.
“It seems reasonable, given firms’ sky-high investment spending intentions, to think that March will see a clear rebound,” Pantheon Macroeconomics said.
The backdrop of stronger economic data offset rising geopolitical tensions as the U.S. and its allies look to further isolate Russia as the latter’s ongoing conflict with Ukraine rolls into the fifth week.
Biden said the U.S. would respond if Russia uses chemical weapons in Ukraine, and called on Russia to be booted out of the G20.
Uber Technologies (NYSE:UBER), meanwhile, surged 4% after the ride-sharing company said it struck a partnership to add New York taxis to its app.
On the meme stock front, GameStop (NYSE:GME) took a breather from its recent melt-up to remain on a course to snap a seven-day rally.
Cannabis stocks, meanwhile, were also in the ascendency, led by Tilray (NASDAQ:TLRY) and Aurora Cannabis (NASDAQ:ACB) after The U.S. House of Representatives confirmed reports it is set to vote on a bill to federally legalize marijuana next week. A version of the bill previously passed the House in December 2020, but failed to advance in a majority GOP Senate.