NEW YORK (AP) — The U.S. stock market surged on Thursday, with the S&P 500 climbing 0.8% to sit just 0.05% below its all-time closing high set in February. The index briefly surpassed this milestone during the afternoon, marking a significant recovery from its springtime dip, which saw a 20% decline due to concerns over President Donald Trump’s proposed tariffs.
The Dow Jones Industrial Average also experienced a robust rally, increasing by 404 points, or 0.9%, while the Nasdaq composite gained 1%. This upward trend was bolstered by McCormick, a leading seller of cooking spices, which saw its stock jump 5.3% following a better-than-expected profit report and a promising forecast for the fiscal year.
Technology Stocks Lead the Charge
Over recent years, major technology stocks have been the driving force behind market gains. Since the S&P 500 hit a low in April, companies like Nvidia have been at the forefront of this resurgence. Nvidia, a key player in the artificial intelligence sector, saw its stock rise by 0.5%, contributing to a 61% increase since April 8. Similarly, Super Micro Computer, another AI-focused company, saw its stock rise 5.7%, marking a 55% increase since early April.
Micron Technology, a company specializing in computer memory and data storage, reported stronger-than-expected profit and revenue for the latest quarter. Despite this, its stock ended the day down 1% after fluctuating between gains and losses. CEO Sanjay Mehrotra highlighted growing demand for AI-driven memory, with a positive profit forecast for the current quarter.
All told, the S&P 500 rose 48.86 points to 6,141.02. The Dow Jones Industrial Average rose 404.41 to 43,386.84, and the Nasdaq composite gained 194.36 to 20,167.91.
Economic Indicators and Tariff Concerns
Despite the stock market’s impressive performance, Wall Street remains cautious about the potential impact of Trump’s tariffs. The uncertainty surrounding the scale of these tariffs and their economic repercussions continues to loom. Recent economic reports, however, suggest some resilience. Orders for durable goods, such as washing machines, exceeded expectations last month, and fewer U.S. workers filed for unemployment benefits, hinting at a stable job market.
Yet, a report indicating a larger-than-expected contraction of the U.S. economy in the first quarter of 2025 has raised concerns. Economists attribute this to a surge in imports by U.S. companies aiming to preempt tariff impacts, with expectations for improved performance in the coming months.
Bond Market Reactions and Federal Reserve Speculations
Following these economic reports, Treasury yields exhibited volatility before stabilizing. The yield on the 10-year Treasury fell to 4.24% from 4.29%, while the two-year Treasury yield, closely tied to Federal Reserve expectations, decreased to 3.71% from 3.74%.
Speculation about the future of Federal Reserve leadership added to market tensions. A report from The Wall Street Journal suggested that Trump might announce a nominee to replace Fed Chair Jerome Powell earlier than expected, potentially undermining Powell’s authority. This development could impact investor confidence in the Fed’s ability to make independent decisions regarding inflation control.
“Yields fell, the dollar weakened, and break evens rose, all suggesting that a puppet of the White House in the seat of the Chair could be bad for inflation,” said Brian Jacobsen, chief economist at Annex Wealth Management.
Despite these concerns, Jacobsen noted that interest rate decisions remain a collective responsibility of the Fed’s committee, suggesting that other officials could balance the influence of a new chair.
Global Market Movements
Internationally, stock markets presented a mixed picture. European indexes showed varied performance, while in Asia, Japan’s Nikkei 225 rose by 1.6%, and South Korea’s Kospi fell by 0.9%, reflecting diverse regional economic conditions.
The stock market’s proximity to record highs underscores its resilience amidst ongoing economic uncertainties. As investors await further clarity on tariffs and Federal Reserve actions, market dynamics are poised for continued volatility.
AP Business Writer Elaine Kurtenbach contributed to this report.
