NEW YORK, Dec 7 — The Nasdaq led gains among Wall Street’s major indexes today, driven by a rise in Alphabet shares, while investors looked forward to monthly payrolls data for clues on the Federal Reserve’s policy actions.
Shares of the Google-parent were up 5.5 per cent, a day after the release of the company’s most advanced artificial intelligence model called Gemini.
The communication services sub-index housing Alphabet advanced 2.8 per cent, leading gains among the 11 major S&P 500 sectors. Other megacap stocks, including Amazon.com and Apple, rose between 1.3 per cent and 1.5 per cent in early trading.
The tech-heavy Nasdaq has outperformed peers this year, surging 36 per cent on a rally in megacap stocks that has been powered by enthusiasm around the potential for artificial intelligence. Growing hopes of a cut in interest rates next year have also improved sentiment.
Reports showing weak private payrolls and job openings this week have reinforced expectations the Federal Reserve’s furious pace of rate hikes is slowing the economy, potentially allowing the central bank to ease up on its monetary policy next year.
Traders have almost fully priced in the likelihood of the Fed keeping interest rates unchanged at its meeting next week and have nearly 64 per cent odds for a rate cut as soon as March 2024, according to the CME Group’s FedWatch tool.
However, some analysts have warned that markets have been too optimistic about rate cuts and also said the upcoming jobs report will be crucial in determining the chances of a soft landing — where the Fed manages to avert a recession. “They (the Fed) certainly don’t have any cuts coming soon, but are data dependent,” said Joe Saluzzi, co-manager of trading at Themis Trading. “So if data is in line, that basically keeps the Fed on the current path.”
The Labour Department’s report, due tomorrow, is expected to show that non-farm payrolls increased by 180,000 jobs last month after rising by 150,000 in October.
A separate reading showed initial jobless claims stood at 220,000 for the week ended December 2, lower than estimates of 222,000, according to economists polled by Reuters.
Meanwhile, comments from Bank of Japan Governor Kazuo Ueda added to growing speculation that the central bank could soon shift away from its ultra-easy monetary policy.
At 9.36am ET, the Dow Jones Industrial Average was up 30.41 points, or 0.08 per cent, at 36,084.84, the S&P 500 was up 23.18 points, or 0.51 per cent, at 4,572.52, and the Nasdaq Composite was up 128.69 points, or 0.91 per cent, at 14,275.40.
Among other major movers, Advanced Micro Devices rose 4.6 per cent, a day after the chipmaker estimated there was a US$45 billion market for its data center artificial intelligence processors this year.
GameStop slid 3.2 per cent after the videogame retailer missed estimates for quarterly revenue, hurt by rising competition.
Dollar General rose 2.4 per cent as the retailer’s quarterly results beat estimates.
Advancing issues outnumbered decliners by a 1.49-to-1 ratio on the NYSE and by a 1.21-to-1 ratio on the Nasdaq.
The S&P index recorded 8 new 52-week highs and no new lows, while the Nasdaq recorded 25 new highs and 32 new lows. — Reuters
