The S&P 500, Dow Jones, and Nasdaq 100 all closed higher on Thursday, with the S&P 500 and Nasdaq 100 reaching new record highs. The rally was driven by a rebound in chipmakers following Taiwan Semiconductor Manufacturing Co’s optimistic revenue forecast for 2026, fueled by strong demand for AI technologies. However, gains were tempered by a surge in crude oil prices, which rose over 3% amid geopolitical tensions and mixed U.S. economic data.

The mixed economic indicators included a significant drop in weekly jobless claims and a surprising rise in the Philadelphia Fed business outlook survey, contrasting with an unexpected decline in manufacturing production. These developments suggest a resilient labor market but raise concerns about inflationary pressures, particularly with rising oil prices. The Federal Reserve’s stance remains cautious, as indicated by New York Fed President John Williams, who emphasized the need for steady policy amid ongoing uncertainties.

Market professionals should note the potential impact of rising oil prices on sectors sensitive to fuel costs, such as airlines and cruise lines, which saw declines. Conversely, the positive outlook for technology and semiconductor stocks, driven by AI demand, may present investment opportunities as earnings season progresses.

Source: nasdaq.com