Tech Surge Propels S&P 500 Index Closer to Record Highs
The U.S. stock market surged on Thursday, as rebounding technology companies propelled the S&P 500 and Nasdaq closer to record highs. The rally erupted one day after the Federal Reserve all but confirmed that interest rates will remain on hold for the rest of the year.
After a volatile open, Wall Street’s major indexes pivoted sharply higher Thursday afternoon. The S&P 500 Index gained 1.1% to 2,854.88, where it was edging toward a new record high. The large-cap index peaked at 2,930.75 on September 20.
Ten of 11 primary sectors tracked by the S&P 500 finished higher. Technology shares surged 2.5%, with hardware companies rising 3.9%. Semiconductors also padded gains, climbing 3.2%.
Surging tech shares propelled the Nasdaq Composite Index to big gains. The technology-driven benchmark rallied 1.4% to 7,838.96, its highest since October.
The Dow Jones Industrial Average climbed 216.84 points, or 0.8%, to 25,962.51. Shares of Apple Inc. (AAPL) climbed 3.7% to lead all other blue chips higher.
Fed Extends Markets Another Lifeline
Following a year in which interest rates rose four times, the Federal Reserve on Wednesday all but abandoned the prospect of another rate hike anytime soon. The central bank’s now infamous “dot plot” summary of interest rate expectations indicated that rates would remain on hold for the rest of 2019.
The downgrade was accompanied by a dimmer outlook on the economy and inflation, as officials lowered their expectations for both metrics. Gross domestic product (GDP) is expected to grow just 2.1% this year, down from a prior estimate of 2.3%. Annual inflation is likely to reach 1.8% compared with 1.9% previously.
With reassurance that interest rates will remain on hold for longer, stock traders could be eyeing another bull market in the not-too-distant future. The only thing standing in their way is corporate earnings and trade talks.
FBI Joins Investigation into Boeing
With tens of billions in market share wiped out over the past two weeks, Boeing Co (BA) could be staring down another PR nightmare after the FBI joined a federal investigation into the aircraft manufacturer. Regulators have launched a criminal probe to investigate whether the Boeing 737 MAX was properly certified by the Federal Aviation Administration (FAA).
On March 11, a grand jury in Washington issued a “broad subpoena” to obtain information related to the development of the aircraft in the wake of two deadly crashes. The subpoena was issued one day after a Boeing 737 MAX crashed shortly after takeoff in Addis Ababa, killing 157 people. However, the event that launched the actual probe was the Lion Air disaster five months later off the coast of Indonesia that left 189 people dead.
As CCN recently reported, the FAA and Boeing have both confirmed that the 737 MAX fleet was approved to carry passengers as part of the regulator’s “standard certification process.” This process includes an evaluation of design and maintenance requirements.
Featured image courtesy of Shutterstock. Chart via Stockcharts.com.