Nasdaq, S&P 500 Rally To New Record Closing Highs

(RTTNews) - Stocks moved sharply higher over the course of the trading day on Wednesday, adding to the modest gains posted in the previous session. With the rally on the day, the Nasdaq and the S&P 500 reached new record closing highs.

The Nasdaq and the S&P 500 saw further upside going into the close, reaching new highs for the session. The Nasdaq surged 330.86 points or 2.0 percent to 17,187.90 and the S&P 500 jumped 62.69 points or 1.2 percent to 5,354.03, while the narrower Dow posted a more modest gain, rising 96.04 points or 0.3 percent to 38,807.33.

The surge by the Nasdaq came as tech stocks continued to take their cues from Nvidia (NVDA), as the AI darling soared by 5.2 percent to a new record closing high.

Last month, Nvidia announced a ten-for-one stock split, with holders of the company's common stock as of the close of trading on Thursday set receive nine additional shares.

The advance by Nvidia contributed to strength in the broader semiconductor sector, resulting in a 4.5 percent spike by the Philadelphia Semiconductor Index.

Semiconductor equipment manufacturers Applied Materials (AMAT) and KLA Corp. (KLAC) also posted standout gains after Barclays upgraded its rating on the stocks to Equal-Weight from Underweight.

Computer hardware stocks are also saw substantial strength on the day, driving the NYSE Arca Computer Hardware Index up by 3.4 percent.

Shares of Hewlett Packard Enterprise (HPE) skyrocketed by 12.0 percent after the technology company reported fiscal second quarter results that exceeded analyst estimates on both the top and bottom lines.

Networking, software and biotechnology stocks also saw notable strength, while gold, housing and airline stocks turned in some of the best performances outside the tech sector.

The strength on Wall Street also came as a report from payroll processor ADP showing private sector job growth in the U.S. slowed by more than expected in the month of May added to optimism about the outlook for interest rates.

ADP said private sector employment climbed by 152,000 jobs in May after jumping by a downwardly revised 188,000 jobs in April.

Economists had expected private sector employment to increase by 173,000 jobs compared to the addition of 192,000 jobs originally reported for the previous month.

Treasury yields moved lower following the release of the jobs data, with the ten-year yield falling to its lowest levels in two months.

Meanwhile, traders largely shrugged off a separate report from the Institute for Supply Management showing service sector activity returned to growth in the month of May after contracting in April for the first time since December 2022

The ISM said its services PMI jumped to 53.8 in May from 49.4 in April, with a reading above 50 indicating growth in the sector. Economists had expected the index to inch up to 50.8.

With the much bigger than expected increase, the services PMI reached its highest level since hitting 54.1 in August 2023.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan's Nikkei 225 Index slumped by 0.9 percent and China's Shanghai Composite Index slid by 0.8 percent, while South Korea's Kospi jumped by 1.0 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the U.K.'s FTSE 100 Index edged up by 0.2 percent, the French CAC 40 Index and the German DAX Index both advanced by 0.9 percent.

In the bond market, treasuries moved higher over the course of the session after seeing early volatility. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell 4.7 basis points to a two-month closing low of 4.289 percent.

Looking Ahead

Trading on Thursday may be impacted by reaction to reports on weekly jobless claims and the U.S. trade deficit, although traders are likely to be reluctant to make significant moves ahead of the release of the more closely watched monthly jobs report on Friday.