US tech stocks help Wall Street flirt with records

AFP | Washington                                                           

The Daily Tribune – www.newsofbahrain.com

Wall Street was higher for the second day running yesterday as a rally in tech stocks took US indexes to near record levels.

But European markets, which are much less tech-heavy than their American counterparts, lagged as they ended the week lower on concerns about slow growth and high interest rates.

Global equities had rebounded Thursday as tech giants clawed back recent losses, overcoming concerns about central banks delaying rate cuts.

Those gains continued into yesterday, though at a less hectic pace. Still, it was enough for the S&P 500 to at times trade above its record close from just over two years ago, though the index was just shy of its record intraday high of 4,818.62 set on January 4, 2022.

“The tech sector and communication services are still driving the US market, and Europe is missing out because of its lack of tech exposure,” said Kathleen Brooks, research director XTB.

New York’s gains were largely driven by a surge in tech giants including Alphabet, Meta and Nvidia after chip titan Taiwan Semiconductor Manufacturing Co unveiled a strong outlook for capital spending and revenue that boosted hopes for 2024 and as Meta CEO Mark Zuckerberg posted on Instagram that the company is purchasing AI products.

European markets rose initially on the back of the Wall Street rally before turning lower over continued concerns that central banks will delay interest rate cuts and as investors continued to digest news of Germany’s shrinking economic output.

European markets “struggled to build on the gains of yesterday,” said Michael Hewson, chief market analyst at CMC Markets UK.

Shares in Swiss-Swedish engineering group ABB fell 4 percent after it confirmed US House Republicans plan to investigate its sale of software to control port cranes to companies in China.

Earlier, Tokyo stocks put on more than one percent thanks to the weaker yen as data showing slower Japanese inflation eased pressure on the country’s central bank to shift away from its ultra-loose monetary policy.

However, worries over China’s economy continued to weigh on Shanghai and Hong Kong, which extended the year’s losses.

Oil prices were flat as concerns about rising tensions in the Middle East were balanced by forecasts from the International Energy Agency that oil demand growth will halve in 2024.