On the 30th (local time), the three major New York stock indexes all closed sharply higher. The market shook off the shock of the Federal Reserve holding interest rates steady the previous day within 24 hours, and powerful buying poured into technology and semiconductor stocks.
On the New York Stock Exchange, the Dow Jones Industrial Average rose 613.92 points, or 1.2%, to 52,208.06 from the prior transaction day. The Standard & Poor's 500, made up mainly of large-cap stocks, gained 1.7% to finish at 7,437.64. The tech-heavy Nasdaq composite also jumped 2.8% to end at 25,122.18. In particular, the Nasdaq snapped a long six-transaction-day losing streak.
The Federal Reserve, which serves as the Central Bank of the United States, decided the previous day to keep its benchmark interest rate at the current level, citing concerns about inflation, rather than cutting it. Immediately after the decision, deep disappointment spread through a market that had hoped for rate cuts, sending stocks sharply lower. But sentiment flipped completely in a day. A strong belief that the artificial intelligence industry will keep growing drew investors back into the market.
Wall Street experts viewed the rebound positively. Keith Lerner, co-chief investment officer at Truist Advisory Services, said of the recent stock market weakness, "It's merely a breather bringing an overheated market back to normal for a bit," adding, "The massive bull market remains intact."
Sameer Samana, senior global equity strategist at Wells Fargo Investment Institute, also backed the upbeat outlook. "Despite short-term market swings, solid corporate earnings, continued adoption of artificial intelligence technologies, and a sturdy economic backdrop strongly support the U.S. stock market," he said.
Looking at individual names, big tech earnings set the tone for the broader market. Microsoft posted results that blew past expectations, and its shares surged 15%. Its market value swelled by nearly $450 billion in a single day, a record for a single corporation. Revenue from Azure, Microsoft's core cloud service, jumped 43%, boosting risk appetite.
Semiconductor corporations also rocketed higher. Shares of SK hynix ADR, Korea's leading chip corporation, rose more than 17%. Swiss financial corporations UBS raised its target price on SK hynix to $204, saying demand for memory chips essential to artificial intelligence will soar.
Nikolaos Panigirtzoglou, a JPMorgan analyst, said hedge funds wrapped up the process of selling tech and semiconductor stocks to pay down debt much faster than expected. As a result, he added, the risk of a flood of selling diminished, creating a solid floor for semiconductor stocks to rise again.
Ulrike Hoffmann-Burkhardi, a chief investment office strategist at UBS, remained positive on growth in AI-related industries. However, she advised that "to manage the risk of money crowding into a handful of names, investors should broaden into relatively safer defensive tech stocks."
Amid the overall tech rally, shares of Meta, which operates a social media platform, plunged nearly 9%. The company's forward revenue guidance failed to meet investors' expectations.
Amazon, which released results after the regular session closed, delivered a strong beat, proving firm demand in its cloud computing business. By contrast, Apple, which reported at the same time, fell in after-hours transactions, showing a starkly different picture.
Moves in commodities also helped steady stocks. West Texas Intermediate fell 0.9% to $83.67 a barrel. Despite heightened concerns over rising military tensions in the Middle East, news that ship traffic picked up again in the Strait of Hormuz, a key global maritime chokepoint, pulled international oil prices lower. As conditions stabilized at the logistics hub, investors worried about energy supply disruptions breathed a sigh of relief.