AI, chip stocks rally… Dow, S&P 500 hit new all-time highs [New York markets briefing]

All three major U.S. stock indexes rose. Buying in artificial intelligence (AI) and semiconductor-related shares, which had recently undergone a pullback, returned with force.

On the 9th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed up 237.96 points (0.48%) from the previous session at 49,504.07. The Standard & Poor’s (S&P) 500 gained 44.82 points (0.65%) to 6,966.28, while the Nasdaq rose 191.33 points (0.81%) to finish at 23,671.35.

The Dow and the S&P 500 set new all-time highs on a closing basis. By sector, all groups advanced except health care and financials. Materials, consumer discretionary, industrials, utilities and consumer staples each rose more than 1%.

The Philadelphia Semiconductor Index, made up of AI and chip-related names, surged 2.73% to resume its rally. Intel jumped 10.8%, while Broadcom (3.76%), ASML (6.66%), Micron (5.53%), Lam Research (8.66%) and KLA (5.69%) also posted strong gains.

No clear, chip-specific catalyst emerged on the day. However, optimism has been spreading across the market after U.S. President Donald Trump said he had a “great meeting” with Intel CEO Lip-Bu Tan.

Risk appetite for tech stocks was broadly solid as well. All megacaps with market capitalizations above $1 trillion rose except Nvidia. Alphabet extended gains and its closing market cap reached $3.97 trillion, closing in on $4 trillion.

U.S. nonfarm payrolls growth for December last year came in below expectations and slowed from the prior month. The U.S. Department of Labor said nonfarm payrolls increased by 50,000 from the previous month. That was above the estimate (an increase of 60,000).

Downward revisions to earlier data also added to worries about the labor market. Combined job gains for October and November were revised down by 76,000 from previously reported.

Anthony Saglimbene, chief market strategist at Ameriprise Financial, said, “The U.S. employment backdrop has softened but remains solid,” adding, “The fact that jobs could have cooled a bit more than expected is a risk factor, but we are in an environment with both low hiring and low layoffs.”

The consumer sentiment index, which reflects U.S. consumers’ confidence in the economy, improved and beat forecasts. According to the University of Michigan, the preliminary January consumer sentiment index rose 1.1 points from the prior month to 54, the highest level since September last year. It also topped the estimate of 53.5.

U.S. homebuilders PulteGroup surged 7.34%, D.R. Horton rose 7.8% and Lennar jumped 8.85%.

They were expected to benefit after U.S. President Donald Trump instructed subordinate mortgage lenders to purchase $200 billion of mortgage-backed securities (MBS).

According to the CME FedWatch Tool, fed funds futures priced in a 95% probability that rates would be left unchanged in January, up from 88.9% near the prior day’s close.

Byoung-ki Jin, Hankyung.com reporter young71@hankyung.com