Dow Tops 50,000 for First Time Ever as “Oversold” Narrative Spreads [New York Stock Market Briefing]

Korea Economic Daily

Summary

It reported that the Dow surged past the 50,000 level for the first time ever, with the S&P 500 and Nasdaq also rallying sharply.
It said bargain buying flowed in as the view spread that the recent slide was oversold, lifting tech groups such as semiconductors and software.
It reported that risk appetite broadly strengthened, with the Philadelphia Semiconductor Index and airlines jumping and the VIX falling.

All three major US stock indexes surged in a broad-based rally fueled by bargain hunting. The Dow Jones Industrial Average crossed the 50,000 mark for the first time ever, setting a historic milestone.

On the 6th (local time) at the New York Stock Exchange, the Dow rose 1,206.95 points (2.47%) from the previous session to close at 50,115.67. The S&P 500 gained 133.90 points (1.97%) to 6,932.30, while the Nasdaq Composite jumped 490.63 points (2.18%) to end at 23,031.21.

While there was no clear catalyst, buying interest emerged as the view spread that the recent selloff had been overdone. The Dow broke above 50,000 just 15 months after first clearing 45,000 in November of the year before last. Last year, the S&P 500 also topped 7,000 for the first time.

In an AI-led market, high-quality and cyclical stocks that had been relatively left behind came back into focus. Of the Dow’s 30 components, all rose except Amazon and Verizon. Nvidia surged more than 7%, and Caterpillar also posted gains in the 7% range. Walmart, JPMorgan Chase, UnitedHealth, Walt Disney, Goldman Sachs and IBM climbed around 4%.

Strength in semiconductors stood out. The Philadelphia Semiconductor Index jumped 5.7%. Broadcom, AMD and Lam Research rose around 8%, while TSMC, ASML and Intel notched gains in the 5% range.

Software stocks also rebounded. The Dow Jones Software Index rose 2.58%, and Salesforce gained 0.73%. ServiceNow, however, was little changed.

Gabriel Shahin, CEO of Falcon Wealth Planning, said, “We are in a golden age in artificial intelligence right now,” adding, “It just feels like a merry-go-round of money moving around that makes people nervous, but the market is in the middle of a major rebalancing.”

By sector, technology rose 4% and industrials climbed nearly 3%, while healthcare, financials, energy, materials, consumer staples and real estate also posted gains in the 1% range. Consumer discretionary lagged, weighed down by Amazon, which had plunged more than 5% the previous day on earnings disappointment.

Airline stocks jumped more than 7% to post the biggest gain among groups, reflecting expectations for earnings improvement this year and stronger demand for premium services.

The University of Michigan’s preliminary February consumer sentiment index came in at 57.3, up 0.9 points from January’s final reading. According to the CME FedWatch Tool, the probability of rates being held steady in March rose 5 percentage points from the previous day to 80.1%. The CBOE Volatility Index (VIX) fell 4.01 points (18.42%) to 17.76.

Shin Hyun-bo, Hankyung.com reporter greaterfool@hankyung.com