Stock Indices Settle Higher as Nvidia Earnings Spur a Tech Stock Rally

The S&P 500 Index ($SPX) (SPY) closed up by +0.72% on Thursday, the Dow Jones Industrial Average ($DOWI) (DIA) closed up by +0.20%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up by +1.43%. E-mini S&P futures (ESU26) rose +0.68%, and September E-mini Nasdaq futures (NQU26) rose +1.40%.

Stock indices settled higher on Thursday, with the S&P 500, Dow Jones Industrials, and the Nasdaq 100 posting 1-week highs. A blowout outlook from Nvidia bolstered confidence in the artificial intelligence trade and powered technology stocks higher on Thursday. Nvidia rallied more than +8%, leading chipmakers and AI-infrastructure stocks higher after issuing a revenue growth forecast for fiscal 2028 far above expectations. Also, a $31 billion joint venture between Sandisk and Kioxia Holdings to ratchet up flash memory production added to the bullish tone in technology stocks. In addition, cybersecurity stocks rallied on Thursday after better-than-expected earnings from Okta and CrowdStrike Holdings, and software stocks rose after Salesforce forecasted revenue above consensus.

Signs of strength in the US labor market are positive for economic growth and stocks after weekly initial unemployment claims unexpectedly fell -4,000 to 203,000, showing a stronger labor market than expectations of an increase to 208,000.

Hawkish Fed comments on Thursday were bearish for stocks and bonds. Kansas City Fed President Jeff Schmid said current Fed policy is not restraining the economy while inflation continues to run above its 2% target. He added that the interest rate setting "might be accommodative on the short end" and that "we've got work to do." Also, Cleveland Fed President Beth Hammack said now is the time to act to contain inflation, and "I think it's appropriate for the Fed to put some restraint there to help bring inflation back down to target."

Oct WTI crude oil prices (CLV26) rallied more than +1% on Thursday after a Wall Street Journal report said the US has no interest in returning to the terms of the deal it signed with Iran in June, casting doubt on oil flows from the Middle East returning to normal anytime soon. Crude prices also rose on a Bloomberg report that said Russia was planning to escalate the war in Ukraine, which could disrupt Russian crude output and lower global oil supplies.