U.S. stocks closed higher on Thursday, with the Dow Jones Industrial Average reclaiming the 50,000-point level. The Nasdaq Composite and the S&P 500 both set new record closing highs. Market focus centered on Cisco's strong earnings report and high-level talks between the U.S. and China. U.S. import and export prices for April both hit multi-year highs.
The Dow gained 370.26 points, or 0.75%, to close at 50,063.46. The Nasdaq added 232.88 points, or 0.88%, finishing at 26,635.22. The S&P 500 rose 56.99 points, or 0.77%, settling at 7,501.24.
A significant surge in Cisco's stock price boosted the Dow, helping the index regain the 50,000 level it had reached earlier this year. The Nasdaq and S&P 500 both achieved new intraday and closing record highs.
Cisco's shares closed up 13.4% after the software giant reported third-quarter results and guidance that exceeded Wall Street's expectations and announced plans to cut nearly 4,000 jobs.
Analysts noted that both Cisco and NVIDIA supported the Dow's rebound, with Cisco rising 30% over the past two months and NVIDIA gaining 25%. This rally in the Dow occurred amid ongoing Middle East conflicts and heightened investor inflation concerns due to persistently high oil prices.
According to a White House official, Iran was a major topic during Thursday's U.S.-China summit, with both sides agreeing that the Strait of Hormuz must remain open.
In earlier trading, the S&P 500 and Nasdaq Composite had set new intraday and closing records even as investors digested another hotter-than-expected inflation report.
While concerns over rising energy prices continued to weigh on other sectors, technology stocks—particularly semiconductor companies like NVIDIA and Micron Technology—fueled Wednesday's market rebound.
Looking ahead, Peter Mallouk, CEO of Creative Planning, believes chipmakers may have further room to grow.
"This is largely a tech-driven, very, very long bull market... This growth is based on expected earnings. It's not a true speculative bubble. I think chipmakers as a whole are actually undervalued because this is a mega-trend... It seems we have so much demand waiting for supply to meet it, so there's a lot more room to run," Mallouk stated.
On the economic data front, April retail sales met expectations, while initial jobless claims accelerated.
Economic data released Thursday showed U.S. retail sales grew as expected in April, while initial claims for unemployment benefits came in slightly above forecasts.
The Commerce Department reported that seasonally adjusted retail sales, not adjusted for inflation, rose 0.5% month-over-month in April, matching Dow Jones expectations. Excluding autos, retail sales increased 0.7%, 0.1 percentage point below expectations.
Although retail sales largely met expectations, the overall figure received a significant boost from soaring energy prices—sales at gas stations jumped 2.8%, the largest increase among all categories.
Regarding unemployment benefits, the Labor Department reported that initial claims for the week ending May 9 were 211,000, an increase of 12,000 from the prior week and above the expected 205,000. Continuing claims, which lag by a week, rose by 24,000 to 1.78 million.
U.S. import and export prices for April hit their highest levels since 2022.
Thursday brought more negative inflation news, as both import and export prices for April reached multi-year highs.
Import prices for the month jumped 1.9% month-over-month, a full percentage point higher than March's increase and well above the Dow Jones consensus forecast of 0.9%. Over the past 12 months, import prices rose 4.2%, the largest increase since October 2022.
Consistent with other recent data, much of this rise stemmed from energy-related costs: fuel and lubricant prices surged 16.3%, while petroleum and petroleum product prices increased 19%. Non-fuel import prices rose 0.8%, driven by higher prices for capital goods, non-fuel supplies, and food and beverages.
On the export side, price increases were even larger, rising 3.3% month-over-month, bringing the 12-month increase to 8.8%, the highest level since September 2022.
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