Wall Street Surges as AI Stocks Lead Rally/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. stocks soared Thursday as Nvidia’s strong earnings renewed investor confidence in AI-driven growth. Simultaneously, a mixed jobs report kept hopes alive that the Federal Reserve may continue cutting interest rates. The S&P 500 gained 1.7%, nearing record highs, with tech stocks leading the rally.
Wall Street Market Rally Quick Looks
- S&P 500 climbs 1.7%, near all-time high
- Dow Jones up 581 points; Nasdaq rises 2.2%
- Nvidia jumps 3.9% after strong earnings and revenue forecast
- Palantir and Oracle also rise on AI momentum
- Fed rate cut hopes rise after mixed jobs report
- Traders now see 42% chance of December rate cut
- Walmart stock up 3.3% on strong earnings and raised outlook
- 10-year Treasury yield dips to 4.10%
- Global markets rally across Asia and Europe
Deep Look
AI Optimism and Interest Rate Hopes Fuel Major Wall Street Rally
Wall Street surged on Thursday as investors embraced a potent combination of optimism around artificial intelligence and renewed hopes that the Federal Reserve may continue lowering interest rates. The rally was sparked by Nvidia’s standout earnings and a jobs report that gave the market just enough to believe a rate cut may be in play next month.
The S&P 500 rose 1.7%, pushing the index closer to its all-time high set nearly a month ago. The Dow Jones Industrial Average climbed 581 points (1.3%), and the Nasdaq Composite soared 2.2%, with tech and AI-linked stocks leading the charge.
Nvidia Powers AI-Driven Rally
Nvidia once again took center stage. The chipmaker gained 3.9% after releasing blockbuster earnings that beat Wall Street estimates and offering a bullish revenue forecast for the months ahead. The results quieted concerns that Nvidia—and other AI darlings—had risen too far, too fast.
In recent weeks, skepticism had grown that AI stocks were mimicking the dot-com bubble of the early 2000s. Nvidia shares had even dropped more than 10% from record highs. But Wednesday’s late earnings release flipped the script.
Analysts at UBS, led by Timothy Arcuri, called Nvidia’s outlook “undeniably strong,” adding that the ongoing AI infrastructure boom continues to lift “all boats.” In response, Palantir Technologies jumped 5.1%, and Oracle rose 2.8%, reflecting broader investor confidence in AI’s staying power.
Fed Rate Cut Speculation Builds
Markets also got a psychological boost from the government’s delayed September jobs report, finally released Thursday due to a previous federal shutdown. While hiring exceeded expectations, the unemployment rate ticked up slightly to 4.4%.
That combination—solid hiring with softening joblessness—gave investors reason to believe the Fed might be comfortable trimming interest rates in December.
According to CME Group’s FedWatch data, traders now assign a 42% probability to a December rate cut, up from 30% the previous day. Seema Shah, chief global strategist at Principal Asset Management, said the market interpreted the data as “just soft enough” to justify policy easing.
Rate cuts are seen as bullish for the stock market because they reduce borrowing costs and support economic growth. They also help elevate valuations by making future earnings more attractive in comparison to safer bonds.
Retail Sector Adds to Gains
Adding to the positive sentiment was Walmart, which surged 3.3% after reporting strong third-quarter earnings. The retail giant exceeded Wall Street’s forecasts for both sales and profit, and raised its financial outlook heading into the critical holiday shopping season.
While other retailers have offered more cautious guidance, Walmart’s continued ability to attract budget-conscious consumers has helped it outperform in a challenging economic environment.
Bond Market and Global Rally
In the bond market, yields eased slightly. The 10-year Treasury yield fell to 4.10%, down from 4.13% the previous session. Lower yields often correlate with rising equity prices, especially in sectors like technology.
Markets outside the U.S. mirrored the rally. Japan’s Nikkei 225 surged 2.6%, and South Korea’s Kospi rose 1.9%, as enthusiasm about AI and rate relief spread globally. European indexes also closed higher, reflecting broad investor relief after a turbulent economic stretch.
You must Register or Login to post a comment.