AI mania, dip in yields drive S&P, Nasdaq higher
By Amruta Khandekar and Johann M Cherian
(Reuters) -The S&P 500 and Nasdaq climbed on Friday as chipmakers extended gains on persistent AI-frenzy, while a dip in Treasury yields following soft economic data and remarks from Federal Reserve officials gave further boost.
The tech-heavy Nasdaq came within a whisker of its all-time intraday peak hit in November 2021 after notching a record closing high in the previous session.
The index has been riding on an AI wave sparked by chip designer Nvidia (NASDAQ:NVDA)'s bumper forecast last month.
Shares of Nvidia climbed 3.4%, while those of its rival Advanced Micro Devices (NASDAQ:AMD) gained 3.8% to a fresh record high. The broader Philadelphia semiconductor index advanced 3.3% to an all-time peak.
The Wall Street rally further strengthened as the yield on the two-year note dropped to 4.56%.
The dip came after a reading showed U.S. manufacturing slumped further in February. The data, which followed an in-line inflation reading on Thursday, kept alive bets that the Fed could begin cutting interest rates in June.
«All the economic data is not too hot, not too cold and it's pretty solid,» said Randy Frederick, founder of Randy Frederick Media .
«What you really want is just solid business, people to stay employed and to have money to spend. All of that is happening.»
Investors also digested comments from Fed Governor Chris Waller, who said the central bank's upcoming decisions about the ultimate size of its balance sheet has no bearing on its inflation fight.
Meanwhile, Richmond Fed President Thomas Barkin said it is too soon to predict when the Fed will be able to begin cutting rates.
At 11:36 a.m. ET, the Dow Jones Industrial Average was down 21.44 points, or 0.05%, at 38,974.95
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