Chinese Concept Stocks Soar 9%, S&P Hits New Peak
**S&P 500 Index Hits Intraday and Closing Historical Highs
**Chinese Assets Continue to Rise, NASDAQ Golden Dragon China Index Closes Up 10.9%
**U.S. Initial Jobless Claims Drop to a Four-Month Low
U.S. stocks closed higher on Thursday, with the Dow Jones Industrial Average (DJIA) gaining 260 points and the S&P 500 Index setting new intraday and closing historical highs. The second-quarter GDP revision for the United States met expectations. Investors are paying attention to speeches by Federal Reserve Chairman Jerome Powell and other Fed officials to gain further insight into the future path of interest rate cuts.
Driven by a combination of policies, Chinese concept stocks continued their overnight rally on "Super Thursday," with the NASDAQ Golden Dragon China Index closing up 10.9%, reaching a high not seen since May.
As of the close, the DJIA rose by 260.36 points, or 0.62%, to 42,175.11; the NASDAQ Composite Index increased by 108.09 points, or 0.60%, to 18,190.29; and the S&P 500 Index added 23.11 points, or 0.40%, to 5,745.37. Earlier, the S&P 500 Index reached an intraday high of 5,767.37, setting a new historical record.
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The semiconductor sector performed notably well, with the Philadelphia Semiconductor Index closing up 3.77%. This followed Micron Technology's fourth-quarter earnings exceeding analyst expectations and the release of a strong quarterly earnings forecast, with its stock closing up 15.78%. Related stocks such as Applied Materials and Lam Research also rose.
Among popular Chinese concept stocks, Alibaba gained 10%, JD.com rose by 14%, and Bilibili increased by 15%.
On the economic data front for Thursday, figures released by the U.S. Department of Labor on the 26th showed that the number of initial jobless claims in the United States last week fell to 218,000, hitting a four-month low.
In recent months, despite rising unemployment rates and slowing job growth, the number of initial jobless claims has remained relatively low. Analysts believe this is because workers eligible for the benefit have not become unemployed. Although the number of weekly layoff applications remains low, several major companies have announced or implemented layoffs this month.For instance, Paramount Global conducted a second round of layoffs on Tuesday. General Motors announced last week that it would temporarily lay off two-thirds of the workers at an assembly plant in Kansas until mid-2025.
Grace Zwemmer, Deputy Economist at Oxford Economics in the United States, stated: "These data are consistent with a labor market that has cooled but remains healthy, as the current labor market is still characterized by a low rate of layoffs." Zwemmer believes that the latest forecasts from the Federal Reserve indicate that the Fed will cut interest rates by a total of 50 basis points in the remaining two FOMC meetings this year, "The labor market conditions must significantly improve or deteriorate to change this trend."
The final value of the U.S. real GDP annualized quarter-on-quarter rate for the second quarter was 3%, in line with market expectations, with the previous value at 3.00%.
Another set of data showed that in August, the number of U.S. existing home purchase agreements rebounded from a record low, with the decline in mortgage interest rates encouraging some buyers to enter the market. Data released by the National Association of Realtors (NAR) on Thursday showed that existing home purchase agreements rose by 0.6% to 70.6 in August. This indicator was below the median forecast of analysts, who expected a 1% increase.
Lawrence Yun, Chief Economist at NAR, said in a statement: "The slight increase in purchase agreements indicates an improvement in housing affordability, mainly because mortgage interest rates fell to 6.5% in August. However, despite housing prices continuously reaching record highs, the number of purchase agreements remains close to the cyclical low."
On Thursday, several Federal Reserve officials, including Powell, Collins, Kugler, Bowman, Williams, Barr, and Cook, made speeches. Investors will look for clues as to whether the Fed will cut interest rates significantly again in November.
John Williams, President of the Federal Reserve Bank of New York, announced the establishment of an institution composed of private market participants to monitor the use of interest rate benchmarks or reference rates in the financial markets. Williams did not comment on the economic outlook or monetary policy.
Federal Reserve Governor Bowman said she would like the size of the Fed's balance sheet to be as small as possible, but she is not sure if it can return to the level before the COVID-19 pandemic. She said: "I would like the balance sheet to be as small as possible so that we can receive the appropriate signals when the market shows vulnerability or volatility. An abundant reserve system may conceal these signals."
The Federal Reserve's favorite inflation indicator - the core Personal Consumption Expenditure (PCE) price index - will be released on Friday, and the market widely expects the data to confirm Powell's view that the economy remains strong.
Currently, the market expects the probability of the Fed cutting interest rates by 50 basis points at the November policy meeting to be about 62%, and the total amount of interest rate cuts for the year is expected to be 77 basis points.In the commodity market, international oil prices fell on the 26th due to the possibility that Saudi Arabia may abandon its unofficial oil price target of $100 per barrel.
As of the close of the day, the price of light crude oil futures for delivery in November at the New York Mercantile Exchange fell by $2.02, closing at $67.67 per barrel, a decrease of 2.90%.