US stocks: S&P 500 notches record-high close as rate-hike worries ease

On Thursday, August 13, the three major US indices - the S&P 500, Nasdaq, and Dow Jones Industrial Average - all closed at record highs. This surge was driven by gains in large technology companies, particularly memory chip makers Sandisk and Micron Technology, which saw gains of 13.7% and 4.2%, respectively. Technology giants Microsoft and Meta Platforms also saw notable increases, with Microsoft up nearly 1% and Meta rising 2.8%.

However, AI cloud company CoreWeave saw a dip of 1.3%, possibly due to lower than expected revenue growth forecasts.

The S&P 500's rise was fueled by a report showing US producer prices remaining unchanged in July, indicating stable inflation. This news, combined with recent strong earnings forecasts from major tech companies like Microsoft and Amazon, reduced investor concerns about massive spending on AI data centers. Jay Hatfield, CEO of Infrastructure Capital Advisors, noted that the "AI earnings-driven tech boom continues... It's an earnings boom, not a bubble."

By the end of the trading day, the S&P 500 had climbed 0.65%, reaching a closing price of 7,798.99 points, surpassing its previous record high from the previous Friday. The Nasdaq gained 0.81% to 26,803.03 points, while the Dow Jones Industrial Average increased by 0.13% to 53,839.99 points. Seven out of the 11 S&P 500 sector indexes rose, led by communication services (up 1.56%) and real estate (up 1.34%).

Notable declines included Cisco Systems, which fell 8.4% despite delivering an upbeat revenue forecast, and Tapestry, which plunged over 16% following a muted forecast for annual revenue growth. Conversely, Dell Technologies rose 2.1%, and HP added 6.9%, following strong quarterly results from Lenovo.

Trader sentiment is cautious, as the FedWatch tool indicates a 63% probability that the Federal Reserve will keep interest rates unchanged during its September meeting. Brent crude oil futures also saw a 2% drop, settling at US$87.07 per barrel. Advancing issues outnumbered falling ones within the S&P 500 by a ratio of 1.7-to-1, with 30 new highs and one new low. Trading volume on US exchanges was relatively light at 16.1 billion shares, slightly below the 20-day average of 17.5 billion shares.