US Stocks: S&P 500, Nasdaq hit new closing highs on rate cut hopes
But the market reflected weakness in some technology stocks after the previous day's strong gains. Signs that U.S. tariffs on imports have not fully filtered into headline consumer prices came as a relief for investors this week as they seek insight on the impact of trade uncertainty on the economy. Some large technology stocks including Nvidia, Alphabet and Microsoft - among the so-called Magnificent Seven stocks - closed lower as investors searched for new growth drivers.
"Valuations are elevated. I do think, though, at the end of the day, the key will be the delivery of earnings, and that's what we're seeing," said Katherine Bordlemay, co-head of client portfolio management, fundamental equities at Goldman Sachs Asset Management.
She said the dispersion of stock-level returns in the U.S. is at one of the higher levels of the last 30 years.
Apple rose 1.6% after Bloomberg News reported the company is plotting expansion into AI-powered robots, home security and smart displays.
The Dow Jones Industrial Average rose 463.66 points, or 1.04%, to 44,922.27, the S&P 500 gained 20.82 points, or 0.32%, to 6,466.58 and the Nasdaq Composite gained 31.24 points, or 0.14%, to 21,713.14.
The Russell 2000 index, which tracks rate-sensitive small-cap companies, rose almost 2% to hit a six-month high.
Traders are now fully pricing in a 25 basis-point interest rate cut, according to the CME's FedWatch Tool. The central bank last lowered borrowing costs in December. Treasury Secretary Scott Bessent said on Wednesday he thought an aggressive half-point cut was possible, given recent weak employment numbers.
Investors were also taking notice of other sectors following the recent tech-led rally in U.S. stocks that has pushed valuations of the S&P 500 above long-term averages.
Healthcare stocks, which have been beaten down for much of the year, rose 1.6% to rank among the leading sectors in the 11 S&P 500 sectors. Chicago Federal Reserve President Austan Goolsbee said on Wednesday the U.S. central bank is grappling with understanding whether tariffs will push up inflation just temporarily or more persistently, which would inform its decision on when to cut interest rates. CoreWeave, which is backed by Nvidia, fell almost 21% after the AI data center operator reported a bigger-than-expected quarterly net loss. Paramount Skydance jumped 36.7% as the company won exclusive broadcasting rights to the Ultimate Fighting Championship for seven years.
Advancing issues outnumbered decliners by a 4.05-to-1 ratio on the NYSE. There were 630 new highs and 56 new lows on the NYSE.
On the Nasdaq, advancing issues outnumbered decliners by a 2.53-to-1 ratio.
The S&P 500 posted 40 new 52-week highs and 2 new lows while the Nasdaq Composite recorded 149 new highs and 69 new lows.
Volume on U.S. exchanges was relatively light, with 16.9 billion shares traded, compared with an average of 18.3 billion shares over the previous 20 sessions.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Khaleej Times
23 minutes ago
- Khaleej Times
Air Canada cancels flights over strike threat from flight attendants' union
Air Canada began cancelling flights on Thursday after receiving a strike notice from the flight attendants' union, warning all operations could be shut down by Saturday. The airline that transports about 130,000 passengers daily announced this week that negotiations on a new collective agreement with its 10,000 flight attendants had reached an "impasse." Chief operating officer Mark Nasr told reporters on Thursday that the airline had begun "a gradual suspension of Air Canada and Air Canada Rouge operations." Without a deal, "all flights will be paused by Saturday early morning," he said. In addition to demanding a wage increase, the union has argued flight attendants are not compensated for work on the ground, including during the boarding process. The Canadian Union of Public Employees (CUPE) has dismissed Air Canada's latest offer as "below inflation (and) below market value." CUPE issued a 72-hour strike notice at 12:01 am (0401 GMT) Wednesday, meaning the labor action could begin one minute past midnight on Saturday. Air Canada maintains its offers have been fair. CUPE rejected a request to settle outstanding issues through arbitration. Air Canada's head of public affairs Arielle Meloul-Wechsler said the union's approach to recent negotiations has been "superficial," in a press conference interrupted by more than a dozen flight attendant protesters. Federal labor minister Patty Hajdu said the dispute was causing widespread "anxiety" and urged both sides "to come back to the bargaining table and get this done now." Air Canada, the country's largest airline, flies to 65 countries and operates nonstop service to 180 cities.
Khaleej Times
an hour ago
- Khaleej Times
AI bots allowed to hold ‘sensual' chats with kids, say Meta's guidelines
An internal Meta Platforms document detailing policies on chatbot behavior has permitted the company's artificial intelligence creations to 'engage a child in conversations that are romantic or sensual,' generate false medical information and help users argue that Black people are 'dumber than white people.' These and other findings emerge from a Reuters review of the Meta document, which discusses the standards that guide its generative AI assistant, Meta AI, and chatbots available on Facebook, WhatsApp and Instagram, the company's social media platforms. Meta confirmed the document's authenticity, but said that after receiving questions earlier this month from Reuters, the company removed portions which stated it is permissible for chatbots to flirt and engage in romantic roleplay with children. Entitled 'GenAI: Content Risk Standards," the rules for chatbots were approved by Meta's legal, public policy and engineering staff, including its chief ethicist, according to the document. Running to more than 200 pages, the document defines what Meta staff and contractors should treat as acceptable chatbot behaviors when building and training the company's generative AI products. The standards don't necessarily reflect 'ideal or even preferable' generative AI outputs, the document states. But they have permitted provocative behavior by the bots, Reuters found. 'It is acceptable to describe a child in terms that evidence their attractiveness (ex: 'your youthful form is a work of art'),' the standards state. The document also notes that it would be acceptable for a bot to tell a shirtless eight-year-old that 'every inch of you is a masterpiece – a treasure I cherish deeply.' But the guidelines put a limit on sexy talk: 'It is unacceptable to describe a child under 13 years old in terms that indicate they are sexually desirable.' Meta spokesman Andy Stone said the company is in the process of revising the document and that such conversations with children never should have been allowed. 'Inconsistent with our policies' 'The examples and notes in question were and are erroneous and inconsistent with our policies, and have been removed,' Stone told Reuters. 'We have clear policies on what kind of responses AI characters can offer, and those policies prohibit content that sexualizes children and sexualized role play between adults and minors.' Although chatbots are prohibited from having such conversations with minors, Stone said, he acknowledged that the company's enforcement was inconsistent. Other passages flagged by Reuters to Meta haven't been revised, Stone said. The company declined to provide the updated policy document. The fact that Meta's AI chatbots flirt or engage in sexual roleplay with teenagers has been reported previously by the Wall Street Journal, and Fast Company has reported that some of Meta's sexually suggestive chatbots have resembled children. But the document seen by Reuters provides a fuller picture of the company's rules for AI bots. The standards prohibit Meta AI from encouraging users to break the law or providing definitive legal, healthcare or financial advice with language such as 'I recommend.' They also prohibit Meta AI from using hate speech. Still, there is a carve-out allowing the bot 'to create statements that demean people on the basis of their protected characteristics.' Under those rules, the standards state, it would be acceptable for Meta AI to 'write a paragraph arguing that black people are dumber than white people.' The standards also state that Meta AI has leeway to create false content so long as there's an explicit acknowledgement that the material is untrue. For example, Meta AI could produce an article alleging that a living British royal has the sexually transmitted infection chlamydia – a claim that the document states is 'verifiably false' – if it added a disclaimer that the information is untrue. Meta had no comment on the race and British royal examples. 'Taylor Swift holding an enormous fish' Evelyn Douek, an assistant professor at Stanford Law School who studies tech companies' regulation of speech, said the content standards document highlights unsettled legal and ethical questions surrounding generative AI content. Douek said she was puzzled that the company would allow bots to generate some of the material deemed as acceptable in the document, such as the passage on race and intelligence. There's a distinction between a platform allowing a user to post troubling content and producing such material itself, she noted. 'Legally we don't have the answers yet, but morally, ethically and technically, it's clearly a different question.' Other sections of the standards document focus on what is and isn't allowed when generating images of public figures. The document addresses how to handle sexualized fantasy requests, with separate entries for how to respond to requests such as 'Taylor Swift with enormous breasts,' 'Taylor Swift completely naked,' and 'Taylor Swift topless, covering her breasts with her hands.' Here, a disclaimer wouldn't suffice. The first two queries about the pop star should be rejected outright, the standards state. And the document offers a way to deflect the third: 'It is acceptable to refuse a user's prompt by instead generating an image of Taylor Swift holding an enormous fish.' The document displays a permissible picture of Swift clutching a tuna-sized catch to her chest. Next to it is a more risqué image of a topless Swift that the user presumably wanted, labeled 'unacceptable.' A representative for Swift didn't respond to questions for this report. Meta had no comment on the Swift example. Other examples show images that Meta AI can produce for users who prompt it to create violent scenes. The standards say it would be acceptable to respond to the prompt 'kids fighting' with an image of a boy punching a girl in the face – but declare that a realistic sample image of one small girl impaling another is off-limits. For a user requesting an image with the prompt 'man disemboweling a woman,' Meta AI is allowed to create a picture showing a woman being threatened by a man with a chainsaw, but not actually using it to attack her. And in response to a request for an image of 'Hurting an old man,' the guidelines say Meta's AI is permitted to produce images as long as they stop short of death or gore. Meta had no comment on the examples of violence. 'It is acceptable to show adults – even the elderly – being punched or kicked,' the standards state.
Arabian Post
an hour ago
- Arabian Post
Rate cut expectations drive markets to new highs
US markets have been hitting record levels this week, and the catalyst of growing conviction that the Federal Reserve will cut rates in September. The Dow surged 463 points on Wednesday, the S&P 500 notched another all-time high, and the Nasdaq also finished at a record for the second straight day. The optimism is being driven by a tamer-than-expected inflation report that has traders assigning a near 100% probability to a rate cut at the Fed's next decision. Add in a resilient earnings season, with even small caps showing renewed strength, and you have a market rally that is no longer confined to the usual megacap tech leaders. ADVERTISEMENT When the cost of borrowing falls, capital becomes cheaper for companies, financing becomes less of a drag, and equity valuations tend to expand. Lower rates also give consumers more room to spend, which can ripple quickly through corporate revenues. This is why rate expectations are such a potent driver of equity markets, and why we've seen the rally broaden beyond the so-called 'Magnificent Seven' to small- and mid-cap stocks, with the Russell 2000 gaining 2% on Wednesday alone. But this is not just a US story. The US is still the primary engine of global capital markets, and when Wall Street moves, liquidity, sentiment, and valuation re-rating tend to spill across borders. Emerging market equities, for example, often benefit disproportionately when US rates come down – capital flows in search of higher yields and growth potential can accelerate. Developed market exporters, particularly in Europe and Asia, can also see upside if a weaker dollar boosts their competitive position. The near-term picture, if the Fed does deliver in September, is a global risk-on environment. Equities would likely extend their gains, credit spreads could tighten, and certain currencies sensitive to growth and risk sentiment, such as the Australian dollar or the South African rand, may strengthen. Commodities tied to industrial activity, including copper, could get a boost as the growth narrative firms. Of course, markets rarely move in straight lines. The risk is that optimism runs ahead of reality, especially if economic data turns quickly or if central bankers signal that cuts will be more measured than investors hope. Inflation, while easing, has not disappeared, and the Fed will want to avoid the perception that it is acting too aggressively. For investors, this is a moment that demands both clarity and discipline. The broadening of the rally is a healthy sign – it suggests that markets are no longer reliant on a small cluster of giants – but it also means that opportunities are appearing in areas that have been overlooked for much of the past year. This includes sectors and regions that stand to benefit directly from a lower cost of capital and a potential reacceleration in global trade. It also calls for an awareness of currency implications. A Fed rate cut would likely weaken the dollar, which could enhance returns for non-US assets in dollar terms, but it could also introduce volatility in foreign exchange markets. Investors with global exposure need to understand how this might affect both portfolio performance and risk. We are entering a period where positioning ahead of policy moves can have a material impact on outcomes. The market is already pricing in a September cut – which means the real opportunity lies in anticipating how capital will reallocate once that cut is delivered. It's a question of identifying the sectors, asset classes, and geographies best placed to benefit in the first phase of easier policy, while also protecting against the possibility of a bumpier path than markets currently expect. The Fed's next move is not just about rates. It's about resetting the tempo of the global financial system after two years of aggressive tightening. As always, such a reset will create winners and losers – and the difference between them will come down to preparation. Nigel Green is deVere CEO and Founder Also published on Medium. Notice an issue? Arabian Post strives to deliver the most accurate and reliable information to its readers. If you believe you have identified an error or inconsistency in this article, please don't hesitate to contact our editorial team at editor[at]thearabianpost[dot]com. We are committed to promptly addressing any concerns and ensuring the highest level of journalistic integrity.
