NEW YORK, Jan 20 — The S&P 500 posted a record high close yesterday for the first time in two years, fuelled by a rally in chipmakers and other heavyweight technology stocks on optimism around artificial intelligence.

The benchmark’s close confirmed that the S&P 500 has been in a bull market since it closed at its low on October 12, 2022, according to one measure which also puts that date as the end of a bear market.

In a selloff between its record high close of 4,796.56 on January 3, 2022 and its low in October 2022, the S&P 500 tumbled 25 per cent.

Yesterday, the S&P 500 jumped 1.23 per cent to end the session at 4,839.81 points.

“It really is an encouraging day in terms of the action, and 4,800 certainly has been a key level which has been difficult to surmount. So if we continue to move in this direction, that’s going to be a very positive sentiment sign,” said Lisa Erickson, head of public markets at US Bank Wealth Management in Minneapolis.

Nvidia climbed 4.2 per cent and Advanced Micro Devices rallied over 7 per cent after server maker Super Micro Computer lifted its second-quarter profit forecast, sending its shares soaring 36 per cent.

Investors exchanged US$31 billion worth of Nvidia’s stock and US$23 billion worth of AMD shares, higher turnover than any other company on Wall Street, according to LSEG data.

The Philadelphia SE Semiconductor index soared 4 per cent to a record high, while the S&P 500 information technology sector index .SPLRCT jumped more than 2 per cent to a record highs.

Microsoft and Apple, the world’s two most valuable companies, both rose more than 1 per cent.

Chipmaker stocks have gained since Taiwan Semiconductor Manufacturing Company, the world’s largest contract chipmaker, on Wednesday said it saw booming demand for high-end chips used in AI.

The Nasdaq jumped 1.70 per cent to 15,310.97 points, while Dow Jones Industrial Average rose 1.05 per cent to 37,863.80 points.

Volume on US exchanges was heavy, with 12.3 billion shares traded, compared to an average of 11.5 billion shares over the previous 20 sessions.

After surging through December, Wall Street treaded water in recent weeks as investors reined in expectations the Federal Reserve would start cutting interest rates as soon as March.

Interest rate traders now see a 52 per cent chance of a March rate cut, according to the CME Group’s FedWatch Tool.

Stock investors were also cheered on Friday by the University of Michigan’s preliminary survey showing consumer sentiment improved in January to its highest level since the summer of 2021.

“Records are made to be broken and the broadening of market action in the past few months is reassuring. The resiliency of the US economy in general, and most businesses in particular, has been notable,” said Carol Schleif, Chief Investment Officer at chief investment officer at BMO’s family office in Minneapolis.

Travellers Cos jumped 6.7 per cent after the insurer’s fourth-quarter profit more than doubled, while State Street advanced 2.1 per cent after the lender reported record net inflows in its Global Advisors unit in the fourth quarter.

Spirit Airlines rebounded 17 per cent from losses earlier this week as it assessed options to refinance its 2025 debt maturities amid concerns over the airline’s ability to remain afloat.

iRobot slumped almost 27 per cent after a report said the European Union’s competition watchdog plans to block Amazon.com’s US$1.4-billion acquisition of the robot vacuum maker.

Advancing issues outnumbered falling ones within the S&P 500 by a 2.9-to-one ratio.

The S&P 500 posted 60 new highs and 3 new lows; the Nasdaq recorded 97 new highs and 191 new lows. — Reuters