US markets saw a positive day on Thursday, with the Dow Jones gaining over 250 points and the S&P 500 closing at a fresh record high. Investor sentiment was boosted by stronger-than-expected economic data, including lower jobless claims and steady durable goods orders, which helped ease concerns about the Federal Reserve’s interest rate decisions. Micron Technology led gains in the tech sector after issuing robust quarterly guidance, while solid results across semiconductor stocks lifted the broader Nasdaq Composite. Meanwhile, global markets also followed suit, with European stocks rallying on luxury sector strength and Asian markets gaining momentum after China affirmed new economic stimulus measures.

Key Takeaways:

  • S&P 500 Hits New Record High: The S&P 500 rose 0.40%, closing at 5,745.37, marking a fresh all-time high. Gains were largely driven by Micron Technology, which surged after issuing strong quarterly guidance. The index continued its upward momentum, reflecting a positive market response to strong corporate earnings and solid economic data.
  • Dow Climbs Over 250 Points: The Dow Jones Industrial Average jumped 260.36 points, or 0.62%, to close at 42,175.11. Strong economic data and earnings results helped lift the index, with industrials and technology sectors contributing to the rise. The Dow’s performance underscores growing investor optimism amid improving economic indicators.
  • Nasdaq Gains on Micron Surge: The Nasdaq Composite advanced 0.60%, closing at 18,190.29, led by a 14.7% surge in Micron Technology. The company’s robust quarterly guidance, coupled with strong demand for semiconductor products, boosted the broader semiconductor sector. Other chip stocks, such as Applied Materials, ASML Holding, and Lam Research, also rallied, each gaining at least 4%, adding to the Nasdaq’s strong performance.
  • US Jobless Claims and Durable Goods Orders Beat Expectations: Initial jobless claims fell to 218,000, better than the expected 223,000, signalling a resilient labour market. Durable goods orders for August remained unchanged, defying expectations of a 3% decline, further calming concerns about a potential economic slowdown.
  • Treasury Yields Rise After Positive Data: The 10-year Treasury yield increased by 1.1 basis points to 3.791%, while the 2-year Treasury yield rose 6.1 basis points to 3.614%. The increase in yields reflects growing confidence in the US economy, as stronger-than-expected labour market and durable goods data reinforced the outlook for stable growth.
  • European Markets Surge Led by Luxury Stocks: European markets closed higher, with the pan-European Stoxx 600 gaining 1.25%. Luxury goods led the charge, with French giants LVMH and Kering rising 9.5% and 9.6%, respectively. Germany’s DAX climbed 301 points (1.59%), while France’s CAC 40 added 166 points (2.19%). The FTSE 100 in London also rose, adding 16.21 points (0.20%) to close at 8,284.91, driven by gains in household goods and mining stocks. The rally was lifted by strong corporate earnings and optimism in the luxury and consumer sectors.
  • Asian Markets Climb on Chinese Stimulus Measures: China’s CSI 300 rose 4.23%, closing at 3,545.32, marking its highest level in four months. Hong Kong’s Hang Seng Index surged 4.12%, lifted by gains in property development stocks following news that China would extend support for the real estate market. Japan’s Nikkei gained 2.79% to finish at 38,925.63, with strong performance from tech and semiconductor stocks. The rally across Asian markets reflected investor optimism following Beijing’s reaffirmation of economic stimulus measures. Meanwhile, Japan’s Nikkei jumped 2.79%and the broad based Topix was up 2.66% after the BOJ released minutes of its July meeting.
  • Oil Prices Drop on Saudi Production Plans: US crude oil fell 3.26% to $67.41 per barrel, while Brent crude declined 2.91% to $71.32. Prices dropped after reports indicated that Saudi Arabia plans to increase oil production later this year, raising concerns about oversupply in the market. Additionally, weak demand from China and the possibility of increased output from Libya further pressured oil prices.

FX Today:

  • EUR/USD Holds Steady Amid Economic Optimism: EUR/USD traded around 1.1180 as the pair consolidated its recent gains following a series of strong economic data out of the US The pair remains lifted by optimism around the Eurozone’s economic prospects and relative weakness in the US dollar. Upside resistance lies at 1.1200, with support forming around the 50-period SMA at 1.1143. The longer-term trend remains bullish as long as the pair holds above these levels, with further upside possible if positive economic sentiment continues.
  • GBP/USD Reaches Fresh 31-Month High: GBP/USD climbed to 1.3414 as the British pound extended its rally on the back of stronger-than-expected economic data from the UK and weakness in the US dollar. The pair has now broken through key resistance levels, and with support from its 50-period SMA at 1.3294, the bullish trend is expected to continue. Resistance is now seen at 1.3450, with potential gains towards 1.3500. If the pair falls below the 200-period SMA at 1.3128, a deeper correction could be signalled.
  • USD/CHF Under Pressure as Swiss Franc Strengthens: USD/CHF remained subdued, trading around 0.8457 after the Swiss National Bank’s decision to cut interest rates by 25 basis points to 1.0%. The pair is trading below key moving averages, including the 50-period SMA at 0.8470, reflecting a bearish outlook. Further downside could see the pair test support at 0.8400. On the upside, resistance lies at 0.8514, and a break above this could indicate a potential reversal in sentiment.
  • USD/JPY Struggles to Break 145.00: USD/JPY traded flat at 144.72, unable to clear the 145.00 resistance level, forming a “doji” candlestick pattern indicating indecision in the market. Uncertainty surrounding Japan’s political landscape has weighed on the pair, while speeches from the Bank of Japan have had little impact. Further upside will depend on a break above the September high of 145.21, which could lead to a test of the 50-day moving average at 146.49. On the downside, key support lies at 144.11, followed by 143.39.
  • Gold Rallies Amid Market Uncertainty: Gold surged to $2,674.89, nearing an intraday high of $2,677.86, as global uncertainties and demand for safe-haven assets continued to drive prices higher. The precious metal remains well above key support levels, with the 50-period SMA at $2,613.56 providing a solid base for further gains. If gold can sustain momentum above $2,650, it could target the psychological resistance of $2,700. On the downside, a drop below the $2,613.56 support level could signal a potential pullback, but the broader trend remains bullish.

Market Movers:

  • Micron Technology Soars on Strong Guidance: Micron Technology surged 14.7% after issuing stronger-than-expected guidance for the current quarter. The company’s fiscal fourth-quarter results also exceeded analysts’ estimates, driving broad gains across the semiconductor sector. The VanEck Semiconductor ETF (SMH) added 2.9%, with key chip stocks like Applied Materials, ASML Holding, and Lam Research climbing over 4% each.
  • Southwest Airlines Jumps on Revenue Forecast: Shares of Southwest Airlines rose 5.4% after the company raised its third-quarter revenue forecast and authorized $2.5 billion in share buybacks. The airline also announced significant business model changes aimed at boosting profits and fending off activist investor Elliott Investment Management.
  • Super Micro Computer Plunges on DOJ Probe: Super Micro Computer shares plummeted 12% following a report that the US Department of Justice has opened an investigation into the company’s business practices surrounding AI servers. The probe sparked investor concerns, triggering a sharp sell-off.
  • Starbucks Rises on Analyst Upgrade: Starbucks shares climbed nearly 2% after upgraded the stock to outperform. The upgrade was based on confidence in the leadership of the company’s new CEO and expectations of continued strong operational performance.
  • Jabil Gains on Earnings Beat: Jabil shares jumped 11% after reporting better-than-expected quarterly results. The manufacturing solutions provider posted earnings of $2.30 per share, beating the FactSet estimate of $2.22. Revenue came in at $6.96 billion, also exceeding market expectations.
  • New York Community Bank Rallies on Upgrade: New York Community Bank shares jumped 7% after Barclays upgraded the stock to overweight from equal weight. The bank’s favourable risk-reward profile and successful restructuring efforts were highlighted as key factors behind the positive outlook.
  • CarMax Surges on Strong Sales: CarMax shares rose 5% after the company reported better-than-expected sales for the fiscal second quarter. Retail used unit sales increased by 5.1%, which outpaced analyst expectations, driving the stock higher.
  • Bilibili Pops on Goldman Sachs Upgrade: US-listed shares of Chinese internet company Bilibili surged 15.4% after Goldman Sachs upgraded the stock to buy from neutral. The investment bank cited the company’s improving profitability and growth prospects, sparking a rally in the stock.
  • Accenture Gains on Strong Results: Accenture shares rose 5.6% after the company reported fiscal fourth-quarter results that exceeded expectations. Accenture also issued upbeat forward guidance and raised its quarterly dividend, further boosting investor sentiment.

As markets closed on Thursday, investor sentiment remained upbeat amid a steady flow of positive economic data and strong corporate earnings. The S&P 500 hit a fresh record high, while the Dow added over 250 points, driven by gains in tech stocks like Micron Technology. European and Asian markets also rallied, boosted by strong performances from luxury and semiconductor sectors, along with optimism surrounding China’s economic stimulus measures. Meanwhile, oil prices slid following news of Saudi Arabia’s production plans, and US Treasury yields ticked higher on solid labour market and manufacturing data. With a resilient economic backdrop and upbeat corporate forecasts, markets appear poised to maintain their bullish momentum, though investors remain watchful of upcoming developments in the global economy.