(Updated at 4:10 p.m. ET/ 2110 GMT)

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Investors cheer Alphabet’s new AI model

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Advanced Micro Devices climbs after AI-chip market
forecast

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Weekly jobless claims lower than expected

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Indexes: S&P 500 +0.80%, Nasdaq +1.37%, Dow +0.18%

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By Noel Randewich and Shristi Achar A
Dec 7 (Reuters) – The Nasdaq ended sharply higher on
Thursday after Alphabet and Advanced Micro Devices sparked a
megacap rally on fresh optimism about artificial intelligence.
Shares of Alphabet jumped 5.3% as analysts cheered
the launch of the Google-parent’s newest AI model, while AMD
soared nearly 10% after the company estimated the potential
market for its data center AI chips could reach $45 billion this
year.

Other heavyweight tech-related stocks also gained, with
Nvidia and Meta Platforms rising over 2%,
Amazon up 1.6% and Apple 1% higher.
The Philadelphia semiconductor index jumped 2.8%,
increasing its 2023 gain to 48%, much of that fueled by bets
about the future of AI.
“Today it’s an AMD-Google rally. There’s a contagion effect
across the market. Everyone wants to get on the bandwagon,” said
Jay Hatfield, CEO of Infrastructure Capital Management in New
York.
“We’re kind of in this weird market, a tag-team market,
where one day tech leads, and then the next day value and the
broad market lead.”
The S&P 500 has steadily climbed since the end of
October on expectations the Federal Reserve has finished its
campaign of interest rate hikes and that it could begin cutting
rates in March.
The S&P 500 climbed 0.80% to end the session at 4,585.59
points, with 1.8 stocks in the index gaining for each one that
fell.
The most traded stock in the S&P 500 was Tesla ,
with $25.7 billion worth of shares changing hands during the
session. The shares rose 1.37%.
The Nasdaq Composite jumped 1.37% to 14,339.99
points, while Dow Jones Industrial Average rose 0.18% to
36,117.57 points.
Volume on U.S. exchanges was relatively heavy, with 11.2
billion shares traded, compared to an average of 10.8 billion
shares over the previous 20 sessions.
Traders have almost fully priced in the likelihood of the
Fed keeping rates unchanged at its meeting next week.
Data on Thursday showed the number of Americans filing new
claims for unemployment benefits increased less than expected
last week to a seasonally adjusted 220,000 for the week.
A Labor Department jobs report due on Friday could hint at
how quickly the U.S. economy is softening and may sway
expectations about when the Fed is likely to begin cutting
rates. Non-farm payrolls are expected to have increased by
180,000 jobs last month after rising by 150,000 in October.
Interest rate futures imply a nearly 64% chance of a rate
cut as soon as March, according to the CME Group’s FedWatch
tool.
Limiting gains in the Dow, shares of Merck fell 1.7%
after the drugmaker’s immunotherapy combination failed in a lung
cancer study.

(Reporting by Amruta Khandekar and Shristi Achar A in Bangalore
and by Noel Randewich in Oakland, Calif.; Editing by Saumyadeb
Chakrabarty, Anil D’Silva and Richard Chang)
(([email protected]))

Keywords: USA STOCKS/ (UPDATE 7)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Original: TSLA Feed: Nasdaq ends sharply higher as Alphabet and AMD fuel AI surge