US Stocks Rise Amid Strong Economic Data; Gold Hits Record High
US stocks rose on Thursday, following gains in European markets, as investors reacted to mixed earnings reports and encouraging economic data. Gold reached a record high, benefitting from its status as a safe-haven asset amid uncertainty surrounding the upcoming US election.
Gold’s climb to an all-time high reflects investor concerns about market volatility and political uncertainties. Meanwhile, technology stocks, particularly semiconductor companies, played a key role in boosting US indices.
Semiconductor Strength Drives US Stock Rally
Technology shares led the market surge, with the semiconductor sector making significant gains. Taiwan Semiconductor Manufacturing (TSMC) reported better-than-expected earnings and forecast a revenue jump for the fourth quarter. This eased concerns about a slowdown in AI-related demand.
Michael Green, chief strategist at Simplify Asset Management, commented on TSMC’s performance: “The semiconductor sector’s strength, especially TSMC’s upward guidance, reassures investors that the predicted slowdown is not appearing, at least in their order books.” He added that this leadership, along with positive retail sales data, is driving US stocks higher.
Retail Sales and Jobs Data Boost Confidence
US retail sales data exceeded expectations, adding to investor optimism about the strength of the economy. Additionally, initial jobless claims were lower than anticipated, further supporting the market rally. The Dow Jones Industrial Average rose by 152.46 points (0.35%), reaching 43,229.15. Meanwhile, the S&P 500 gained 4.07 points (0.07%) and the Nasdaq Composite added 32.63 points (0.18%).
Growth stocks outperformed value stocks, and regional banks benefited from strong earnings reports, particularly from M&T Bank and KeyCorp.
European Shares Rally as ECB Cuts Rates
European stocks followed a similar upward trend, closing near record highs after the European Central Bank (ECB) cut interest rates by 25 basis points. This was the ECB’s third rate cut this year, aimed at supporting the EU’s struggling economy. The STOXX 600 index climbed by 0.83%, while the FTSEurofirst 300 index rose by 0.87%.
Bond Yields and Dollar Strengthen
US Treasury yields rose as the economic data pointed to a resilient US economy. The 10-year Treasury note yield increased by 7.7 basis points to 4.093%. The 30-year bond yield rose to 4.3924%, and the 2-year note yield, closely tied to interest rate expectations, climbed to 3.978%.
The dollar also strengthened, reaching an 11-week high after retail sales data boosted confidence. The dollar index rose by 0.24%, with the euro slipping to $1.0828, and the dollar gaining 0.39% against the Japanese yen.
Oil Prices Edge Higher Amid Middle East Tensions
Oil prices moved higher as investors weighed developments in the Middle East and declining US crude inventories. US crude increased by 0.40% to $70.67 per barrel, while Brent crude rose by 0.31% to $74.45 per barrel.