Semiconductor Stocks Powered Market Rally Continues to March Ahead

Barry Adams
04 Mar, 2024
New York City

Stocks in early trading lacked direction, and benchmark indexes edged slightly lower in Monday's trading. 

The S&P 500 index and the Nasdaq Composite traded near record highs reached last week after markets extended a five-month rally following the enthusiasm surrounding artificial intelligence and sharp gains in semiconductor industry stocks. 

Investors bid up stocks after better-than-expected earnings contributed to the market's enthusiasm, and investors embraced the hotter-than-expected inflation report last week. 

The personal consumption expenditures price index, an alternative measure of inflation that accounts for product substitution by consumers, increased by 0.3% on the month and by 2.4% from a year ago. 

The inflation data met investors’ expectations, but the report also signaled that policymakers most likely will wait for another three months before lowering rates.

Seasonally adjusted new home sales in January rose 1.5% to 661,000, driven by lower mortgage rates in the month, the U.S. Census Bureau reported Monday.

The median sales price of new houses sold in January was $420,700, higher than $413,100 in December but lower than 432,100 a year ago. 

The housing market report confirmed that affordability issues and tight market conditions are not likely to go away anytime soon.

The U.S. economic growth was revised downward in the fourth quarter to 3.2% from the preliminary estimate of 3.3%, following the 4.9% annual pace of increase in the third quarter, the U.S. Bureau of Economic Analysis reported Wednesday. 

For the full-year 2023, the GDP growth in the second estimate was unrevised at 2.5%, compared to 1.9% in 2022. 

This week, investors are expecting non-farm payrolls to expand by 190,000 in January, slower than the 353,000 job gains in December.

The unemployment rate is expected to hold steady at 3.7%, and wage growth is expected to cool to 0.2%.

Moreover, the JOLTs report is expected to show job openings shrank to 8.9 million, following two months of increases in a row. 

 

U.S. indexes and Yields

The S&P 500 index decreased 0.1% to 5,131.86, and the Nasdaq Composite decreased 0.1% to 16,260.71. 

The yield on 2-year Treasury notes decreased to 4.57%, 10-year Treasury notes inched down to 4.21%, and 30-year Treasury bonds edged down to 4.37%.

WTI crude oil increased $0.46 to $79.50 a barrel, and natural gas prices decreased 13 cents to $1.97 a thermal unit.

Gold increased by $1.21 to $2,082.22 an ounce, and silver fell 7 cents to $22.70. 

The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 103.93.

 

U.S. Stock Movers

Apple decreased 1.7% to $177.14 after the European Commission fined the popular iPhone maker Є1.8 billion for its alleged "abusive" app store practices for streaming music service providers. 

Cryptocurrency-linked stocks advanced after Bitcoin surged 3.5% to 65,367.20, only 5% shy of its record high of $69,000. 

Coinbase advanced 6% to $219.32, MicroStrategy soared 9.2% to $1,183.0, Marathon Digital gained 4.5% to $28.09, Robinhood Markets inched up 3.2% to $17.11, and Riot Platforms traded up 4.4% to $17.11. 

Super Micro and Deckers Outdoor advanced after the two companies were selected to be added later in the month to the popular benchmark S&P 500 index managed by S&P Dow Jones Indices. 

Zions Bancorp and Whirlpool will be moved from the S&P 500 to the S&P MidCap 400 index. 

Super Micro Computer jumped 15.96% to $1,050.02, and Deckers Outdoor jumped 4.3% to $942.0. 

Spirit Airlines plunged 14% to $5.55 and JetBlue gained 4% to $6.70 after the two companies canceled their merger plans, facing antitrust regulatory hurdles.