S&P 500 Jumps 1.1%, Dow Adds 250 Points Amid Strong Tech Gains
U.S. stock markets rallied on Monday from last week’s losses as semiconductor stocks surged. The Dow Jones Industrial Average gained 280 points (0.7%), the S&P 500 rose nearly 1%, and the Nasdaq Composite added 1.5%.
Nvidia’s (NVDA, Financial) shares, however, gained nearly 4.7% to hold close to a record, while chipmakers helped lead the day’s gains. Broadcom (AVGO, Financial) added 1.5%, while Micron Technology (MU, Financial) rose more than 10.5%.
Foxconn’s announcement of record fourth-quarter revenue thanks to surging demand for AI servers spurred a surge in semiconductor stock. Revenue at Foxconn rose 15.2 per cent in Q4 2024 to T$2.13 trillion ($64.72 billion), beating analysts’ estimates.
They were complemented by a report that President-elect Donald Trump’s plan for tariffs would be narrower than expected, affecting critical imports. This development was enough to reduce the risk of a global trade war and helped companies like Ford and General Motors, whose shares rocketed 1.6 per cent and 4.1 per cent, respectively.
While optimists paint an optimistic picture, CFRA Research chief investment strategist Sam Stovall said valuations look a bit restrictive. The market is primed to like tech, he said, with expectations for earnings growth of 20% this year compared to 12.8% for the overall market. But, he said, the group may not do so on the basis that it is cheap on price-to-earnings multiples but will rather have to be driven organically by earnings.
They’re also watching upcoming economic data, including next month’s December jobs report for more information on the health of the economy, including potential Federal Reserve policy adjustments.
This article first appeared on GuruFocus.
