US stock market rallied to fresh highs on Thursday, with the Dow Jones Industrial Average hitting a record above 46,000. The S&P 500 and Nasdaq Composite also reached all-time highs, fueled by strong gains in tech stocks such as Nvidia and Micron.
Investors responded to a mix of economic data showing rising inflation and weakening labor market signals, while betting on an imminent Federal Reserve rate cut.
Consumer prices rose 2.9% year-over-year in August, slightly faster than July’s 2.7%, according to the Bureau of Labor Statistics. Month-over-month, prices climbed 0.4%, above economists’ expectations of 0.3%. Core inflation, which excludes food and energy, remained steady at 3.1% annually.
While inflation remains above the Fed’s 2% target, market participants expect the central bank to act primarily in response to softening employment data rather than price pressures.
Weekly jobless claims jumped to 263,000, the highest level since 2021, signaling a cooling labor market. Revisions to previous job growth data also showed the economy employed 911,000 fewer people than initially reported over the past year.
The softening labor market has boosted expectations for a larger-than-expected Fed rate cut at the upcoming September 17 meeting, with traders pricing in over a 90% chance of a 0.25% reduction and multiple cuts likely before year-end.On the corporate front, Micron Technology (MU) surged nearly 9% after Citi raised its price target to $175, citing strong AI-driven memory demand. Kroger (KR) beat earnings estimates and raised its guidance, while UPS and FedEx were downgraded due to trade policy changes affecting the de minimis exemption.
Market Performance: Dow, S&P 500, Nasdaq
The Dow led Thursday’s rally, climbing 518 points, or 1.15%, to a new record above 46,000. The 30-stock index hit an intraday high of 46,013, driven by gains in major industrial and tech-related stocks. Investors reacted to a mix of economic data, including rising jobless claims and steady inflation, anticipating an upcoming Fed rate cut.
The S&P 500 advanced 0.7%, reaching an all-time intraday high of 6,572.09. Broad market gains were supported by technology and consumer discretionary sectors, with notable contributions from Nvidia, Micron, Apple, and Microsoft. The index remains on track for consecutive record closes, reflecting investor optimism amid moderating economic growth and expected monetary easing.
The Nasdaq Composite gained 0.6%, climbing to 22,002.13, driven largely by strong performance in AI-related tech stocks. Nvidia and Micron led the charge, while Oracle saw a pullback after its previous record surge. Overall, the tech-heavy index reflects market enthusiasm for AI and cloud technology, balanced against broader macroeconomic uncertainties.
Oracle stock pulls back after record rally; Apple Shares up
Oracle shares retreated about 4% after soaring 36% in the previous session. The rally was fueled by a massive jump in the company’s remaining performance obligations (RPO), which surged to $455 billion—a 359% increase year-over-year.
Despite the pullback, analysts remain positive, with Jefferies raising its price target to $360, citing strong growth prospects in Oracle’s cloud infrastructure and AI-driven offerings.
Apple’s stock opened at $226.75, reached a high of $229.29, and closed at $228.69, marking a 0.8% increase.
Treasury Yields and Commodity Moves
The benchmark 10-year Treasury yield briefly dipped below 4% for the first time since April before retracing. Falling yields often indicate increased demand for safe-haven assets amid expectations for Fed easing.
Oil prices declined as markets considered OPEC+’s plan to raise crude output alongside geopolitical tensions. European defense stocks extended gains, reflecting broader global market dynamics.
Inflation Update: CPI Rises, Core Inflation Steady
August’s Consumer Price Index (CPI) showed consumer prices rising 2.9% year-over-year, up from 2.7% in July and in line with economists’ expectations.
On a monthly basis, prices increased 0.4%, slightly above the 0.3% expected. Core CPI, which excludes volatile food and energy, remained at 3.1% year-over-year with a 0.3% monthly gain, matching forecasts.
Key Earnings Moves
Kroger (KR) Beats Estimates
Kroger shares rose 1.8% premarket after reporting EPS of $1.04, surpassing Wall Street expectations of $1. Revenue came in at $33.9 billion, slightly below forecasts, while same-store sales growth was raised to 2.7%-3.4%. The company has been streamlining operations under interim CEO Ron Sargent, closing 60 stores and cutting 1,000 jobs.
Adobe (ADBE) and Other Corporate News
Adobe’s results are awaited, while Micron Technology (MU) surged 8.8% to $152.32 after Citi raised its price target to $175. Strong demand from AI data centers and limited supply drove optimism. Analysts expect Q1 revenue guidance of $13 billion, exceeding the $11.8 billion consensus.
Logistics Sector: UPS and FedEx Downgraded
Bank of America downgraded UPS (UPS) to Underperform and FedEx (FDX) to Neutral after the removal of the de minimis exemption, which had allowed low-value imports to enter the U.S. duty-free. UPS traded flat at $83.59, while FedEx rose 1.2%, reflecting market adjustments to changing trade policies.
Market Movers
- Opendoor Technologies: Jumped 33.6% after naming Shopify executive Kaz Nejatian as CEO.
- Oxford Industries: Rose 18.3% after Q2 earnings beat expectations and forecasted lower tariff impact.
- Klarna: Fell 1% after a strong NYSE debut the previous day.
Rate Cuts Fuel Optimism
Investors are betting on Fed easing after Thursday’s inflation and jobless claims data. Analyst Chris Zaccarelli called it “the rate-cutting horse leaving the barn,” highlighting the shift from uncertainty to anticipation of multiple cuts.
Equity markets, led by the Dow and tech-heavy Nasdaq, may continue their upward trajectory if Treasury yields trend lower and Fed policy supports growth. Technology, AI-driven sectors, and select consumer staples are expected to remain key areas of market strength.