Nasdaq ends sharply higher as Alphabet, AMD fuel AI surge
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Traders working on the floor at the New York Stock Exchange, in New York City.
PHOTO: REUTERS
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NEW YORK – The Nasdaq ended sharply higher on Dec 7, after Alphabet and Advanced Micro Devices sparked a mega cap-rally on fresh optimism about artificial intelligence (AI).
Shares of Alphabet jumped as analysts cheered the launch of the Google-parent’s newest AI model, while AMD soared after the company estimated the potential market for its data centre AI chips could reach US$45 billion (S$60.2 billion) in 2023.
Other heavyweight tech-related stocks also gained, with Nvidia, Amazon, Meta Platforms and Apple rising for most of the session.
The Philadelphia semiconductor index jumped and increased its 2023 gain to around 48 per cent, much of that fuelled by bets about the future of AI.
“Today, it’s an AMD-Google rally. There’s a contagion effect across the market. Everyone wants to get on the bandwagon,” said Mr Jay Hatfield, chief executive of Infrastructure Capital Management in New York.
“We’re kind of in this weird market, a tag-team market, where one day tech leads, and then the next day value and the broad market lead.”
The S&P 500 has steadily climbed since the end of October on expectations the Federal Reserve has finished its campaign of interest rate hikes and that it could begin cutting rates in March.
According to preliminary data, the S&P 500 gained 35.66 points, or 0.8 per cent, to end at 4,585.60 points, while the Nasdaq Composite gained 193.28 points, or 1.37 per cent, to 14,339.99.
The Dow Jones Industrial Average rose 62.70 points, or 0.17 per cent, to 36,117.13.
Traders have almost fully priced in the likelihood of the Fed keeping rates unchanged at its meeting next week.
Data on Dec 7 showed the number of Americans filing new claims for unemployment benefits increased less than expected last week to a seasonally adjusted 220,000 for the week.
A Labour Department jobs report due on Dec 8 could hint at how quickly the US economy is softening and may sway expectations about when the Fed is likely to begin cutting rates.
Non-farm payrolls are expected to have increased by 180,000 jobs in November after rising by 150,000 in October.
Interest rate futures imply a nearly 64 per cent chance of a rate cut as soon as March, according to the CME Group’s FedWatch tool.
Limiting gains in the Dow, shares of Merck fell after the drugmaker’s immunotherapy combination failed in a lung cancer study. REUTERS
