Moving Markets Today: S&P 500 Inches Closer to 5,000, Japanese Stocks Hit 34-Year High, Arm Shares Surge 55%, Eyes on PepsiCo Earnings and Fed commentary
The S&P 500 stock index achieved a historic milestone, crossing the 5,000 mark for the first time ever, primarily propelled by a select group of companies. Simultaneously, Japanese shares surged to their highest levels in 34 years, contributing to the S&P 500’s record close. Oil prices witnessed a notable weekly rise, driven by Israel’s rejection of a ceasefire offer from Hamas. Trading in Asia was subdued due to the closure of Chinese markets for the Lunar New Year and a shortened session in Hong Kong. Arm shares experienced a remarkable surge of over 55%, buoyed by an AI-driven boom, which brightened growth prospects. Later in the day, market watchers will closely scrutinize revisions to U.S. inflation figures for any significant shifts. Additionally, investors anticipate earnings reports from snack giant PepsiCo, scheduled for release on Friday. Here are five key takeaways for your day.
Arm Stock Skyrockets Amid AI Surge, Bolstering Growth Outlook
Arm Holdings shares surged over 55% on Thursday, marking their best day since their market debut in September. The surge was driven by strong demand forecasts for its chip technology used in artificial intelligence. This would push the British chip designer’s market value beyond $100 billion, as investors see it as a bet on AI, Reuters reported. This rally contrasts sharply with its initial public offering in late 2023 when shares declined. Arm’s executives noted on Wednesday that customers were increasingly adopting its technology alongside Nvidia’s chips for AI tasks in data centers. Moreover, Arm is developing new laptops and smartphones capable of handling advanced AI features.
Stocks on the Move: Ralph Lauren, Disney Rally; Kenvue, PayPal Plunge
Key stock movements on the New York Stock Exchange included notable changes in Ralph Lauren, Disney, Kenvue, and PayPal. Ralph Lauren surged by 16.8%, driven by strong earnings in China despite weaker North American sales. Disney’s shares rose by 11.5% after exceeding expectations and announcing a $3 billion share buyback and a 50% dividend increase. Conversely, Kenvue’s shares fell by 5.8% due to disappointing fourth-quarter results, the Financial Times reported. PayPal shares plummeted by 11.2% following a forecast of flat growth in adjusted profit for the current year.
China’s Central Bank Commits to Sustaining Policy Support for Economy
The People’s Bank of China, on Thursday, stated its intention to maintain adaptable and precise policies aimed at boosting domestic demand while also ensuring stable prices. This announcement comes in light of a somewhat uneven economic recovery and growing deflationary risks. In its quarterly policy implementation report, the central bank acknowledged the difficulties and challenges it faces in promoting economic recovery amidst global uncertainties.
Oil Prices Surge as Israel Rejects Ceasefire Proposal
Oil prices saw a notable rise after Israeli Prime Minister Benjamin Netanyahu turned down a ceasefire proposal with Hamas. Brent crude, which serves as the global benchmark, surged by 3.1% on Thursday, reaching $81.63 per barrel, marking its most significant single-day increase since January 3rd. Additionally, West Texas Intermediate, the standard for the US, also climbed by 3.2%, marking its most substantial daily gain in a month. Netanyahu’s rejection of the ceasefire came amid US Secretary of State Antony Blinken’s efforts to negotiate peace in the Middle East. Despite Blinken’s involvement, Netanyahu pledged to persist in the conflict in Gaza.
On Thursday, Israeli forces carried out airstrikes in Rafah, where a significant portion of Gaza’s population sought refuge.
Nikkei Surges to Record Highs While Hong Kong Inches Toward Holiday Break
Major US stocks, known as blue-chip stocks, hit a high point of 5,000.4 before settling slightly higher at a new record of 4,997.91, marking a slight increase of 0.1% for the day and nearly a 5% rise since the start of the year. The Dow Jones rising to 38,726.33 and the Nasdaq reaching 15,793.72. In Hong Kong, the Hang Seng index dropped 2% as investors awaited Beijing’s financial market support. Mainland Chinese markets were closed for the lunar new year. Japan’s Topix increased by 0.2%, and the Nikkei 225 climbed 0.5%. The Hong Kong Stock Exchange closed midday ahead of the holidays, set to reopen Wednesday. US bond yields rose after positive job reports and cautious central bank comments. Two-year yields hit 4.45%, while ten-year yields settled at 4.14% on Friday. Higher yields supported the US dollar, with the dollar index poised for its sixth week without losses. Gold remained at $2,034 per ounce, while Bitcoin surged 6.6% to $45,367, marking its best week in two months.