US close: S&P 500 hits new record after Powell comments

7th Mar 2024 20:56

(Sharecast News) - US stock markets rose on Thursday, with the S&P 500 notching another record high on the back of strong gains for tech stocks, after comments from the head of the Federal Reserve raised hopes that interest-rate cuts were nearing a reality.

The S&P 500 reached a new high of 5,157.36, rising 1.03% on the day, surpassing a previous peak of 5,137.08 reached on 1 March. The Dow finished up 0.34%, while the tech-heavy Nasdaq jumped 1.5% with six of the Magnificent Seven stocks finishing with gains.

Sentiment was being boosted by Federal Reserve chair Jerome Powell who said that the central bank would consider "carefully removing" its restrictive stance as long as data keeps moving in the right direction. In a testimony on Capitol Hill, Powell said policymakers were "not far" from gaining the confidence needed to cut rates.

"Powell said that the Fed was not yet ready to cut. But he also said that the central bank wasn't looking for better inflation readings than those seem recently, just a longer run of them," said David Morrison, senior market analyst at Trade Nation.

It's a busy week for labour-market data releases: Wednesday's ADP employment report was broadly in line with forecasts; job openings were little changed showing that hiring demand was still relatively strong; while jobless claims were unchanged from the prior week's upwardly revised reading of 217,000. Friday will see the all-important non-farm payrolls survey, which is expected to show that job growth cooled from January's forecast-beating print of 353,000 to 200,000 in February.

In other news, the US trade deficit in goods widened to $90.20bn in January, up from a revised print of $87.89bn in December, according to the Census Bureau. Imports rose by 1.1%, driven by sales of capital goods and vehicles, while exports increased at a much slower rate of 0.2% amid declines in exports of industrial supplies, as well as foods, feeds and beverages.

Kroger and Novo Nordisk jump

Supermarket group Kroger surged 10% after smashing estimates with fourth-quarter profits, with adjusted earnings per share coming in at $1.34 against the $1.13 expected.

US shares in Novo Nordisk jumped after the Danish pharmaceutical firm detailed promising trial data for its experimental anti-obesity drug amycretin.

Victoria's Secret slumped nearly 30% after the lingerie retailer disappointed the market with sales guidance for the first quarter and full year, while sector peer American Eagle Outfitters underwhelmed with a forecast-beating fourth quarter.