U.S. stocks maintained their upward momentum into Thursday's close, with the Dow Jones Industrial Average gaining 380 points. The Nasdaq Composite and the S&P 500 briefly reached new intraday record highs. Market focus centered on Cisco Systems' strong earnings report and high-level talks between the U.S. and China. U.S. import and export prices for April hit multi-year highs.
The Dow Jones Industrial Average rose 382.80 points, or 0.77%, to close at 50,076.00. The Nasdaq Composite gained 218.34 points, or 0.83%, to finish at 26,620.68. The S&P 500 increased by 54.77 points, or 0.74%, ending the session at 7,499.02.
Shares of Cisco Systems surged after the software giant reported third-quarter results and guidance that exceeded Wall Street expectations and announced plans to cut nearly 4,000 jobs.
The rally in Cisco helped lift the Dow, allowing it to briefly reclaim the 50,000 level it had reached earlier in the year during Thursday's trading.
Cisco, Nvidia, and Amazon all contributed to the Dow's rebound, with Cisco and Amazon having risen 30% over the past two months and Nvidia up 25%. This advance in the Dow occurred against a backdrop of ongoing conflict in the Middle East and persistently high oil prices, which have heightened investor concerns about inflation.
According to a White House official, Iran was a major topic of discussion 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 set new intraday and closing records even as investors digested another hotter-than-expected inflation report.
While concerns about rising energy prices continued to weigh on other sectors, technology stocks—particularly semiconductor companies like Nvidia and Micron Technology—drove Wednesday's market rally.
Looking ahead, Peter Mallouk, CEO of Creative Planning, believes chipmakers may have further room to rise.
"This is largely a tech-driven, very, very long bull market... This growth is coming from expected earnings. It's not a true speculative bubble. I think chipmakers as a group are actually undervalued because it's such a big trend... It seems we have so much demand waiting for supply, so there's a lot of runway left," 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 higher than anticipated.
The U.S. Commerce Department reported that seasonally adjusted retail sales, unadjusted for inflation, rose 0.5% month-over-month in April, matching the Dow Jones consensus. Excluding autos, retail sales increased 0.7%, 0.1 percentage point below expectations.
Although retail sales largely met forecasts, the headline figure was significantly boosted by surging energy prices—gas station sales jumped 2.8%, the largest increase among all categories.
Regarding unemployment benefits, the U.S. Labor Department reported that initial claims for the week ending May 9 rose by 12,000 to 211,000, exceeding the expectation of 205,000. Continuing claims, which lag by one week, increased by 24,000 to 1.78 million.
U.S. import and export prices for April reached their highest levels since 2022.
Thursday brought more concerning inflation news, as U.S. import and export prices for April both hit multi-year highs.
Import prices for the month jumped 1.9% month-over-month, a full percentage point higher than the March increase and well above the Dow Jones consensus forecast of 0.9%. On a 12-month basis, import prices rose 4.2%, the largest increase since October 2022.
Consistent with other recent data, the increase was largely driven by energy-related costs: fuel and lubricant prices surged 16.3%, while petroleum and petroleum product prices rose 19%. Non-fuel import prices increased 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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