Wall Street Highlights: S&P 500, Nasdaq Rise With Nvidia Leading as Semiconductor Companies Surge

The S&P 500 Index climbed 1.1%, while the tech-heavy Nasdaq 100 added 2.5%. Chips companies Micron Technology Inc. and Broadcom Inc. were among the top S&P 500 gainers. Intel Corp. also jumped after President Donald Trump said the chipmaker struck a deal with Apple Inc. to design and produce semiconductors domestically. Apple edged higher after CEO Tim Cook told the Wall Street Journal the company plans to raise prices to offset higher memory and storage chips costs.

Volume was above average, and spiked into the close ahead of the Juneteenth holiday weekend and as New York City celebrated the newly crowned NBA champion New York Knicks in lower Manhattan. The largest-ever US options expiry in history was also slated for Thursday, with $8.3 trillion of notional exposure set to roll off, according to data from Citadel Securities.

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A combination of the Federal Reserve chairman's first meeting, along with equity markets ETFs like the Invesco QQQ Trust Series and the VanEck Semiconductor ETF trading at all-time highs and the resolution of the Middle East conflict "drove up appetite to lean on options to navigate risk-reward," Citigroup strategist Vishal Vivek said. "Investors are increasingly using call options to position for upside."

West Texas Intermediate crude oil was little changed at about $77 as Trump signed an interim deal to end the war with Iran and tankers began transiting the Strait of Hormuz. Yields on 10-year Treasuries were around 4.45%.

Traders increased interest-rate hike bets after Kevin Warsh used his debut press conference as Federal Reserve chairman to make clear the central bank won't tolerate high inflation and signaled a revamp of the central bank's communications strategy.

"A hawked-up Fed puts me in a more defensive mood," Renaissance Macro Research head of economics Neil Dutta wrote late Wednesday. "If Warsh's attention is on a bunch of commissions, Fed communications, balance sheet, use and reliance on existing data sources, productivity and jobs, and Fed inflation frameworks, the balance of power shifts to the hawks." JPMorgan strategists led by Jay Barry wrote, "you'll get nothing and like it."

In earnings news, Accenture PLC tumbled 18%, the most ever, after the IT services company gave a fourth-quarter revenue forecast that fell short of Wall Street's expectations. Supermarket chain Kroger Co. shed 8.4% to close at the lowest since November 2024 after adjusted earnings per share missed estimates and its CFO discussed consumer pressures.

Meantime, a key source of support for big tech stocks is fading as spending on AI is snuffing out steady share buybacks. Of the four biggest spenders - Alphabet Inc., Microsoft Corp., Meta Platforms Inc. and Amazon.com Inc. - only Microsoft bought back shares in the first quarter. Its $3.4 billion in repurchases was the lowest total among the group in nearly a decade.

SpaceX shares fell 3.6%, continuing to slide after registering their first post-IPO loss on Wednesday. The company's bankers were said to be preparing to hold calls with investors as soon as next week to discuss a potential bond offering of least $20 billion.

Alphabet Inc. rose 1.2% even as one of Google's most prominent researchers is leaving for rival OpenAI. Noam Shazeer, who co-authored a seminal paper that helped catalyze the AI boom, announced his departure in an X post. Alphabet-unit Waymo is also recalling thousands of its robotaxis to fix a software issue that could cause the autonomous vehicles to enter and drive at speed through freeway construction zones.

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Amazon.com Inc. climbed 2.9% as it's in talks to sell its custom-made AI chips for use in other companies' data centers.

Sectors in Focus

• IT services companies slid after Accenture's miss. IBM fell 5.1% to the lowest since late May. 
• Exchanges operators. CME Group Inc. was upgraded to outperform at KBW, with analyst Chris Allen writing that perceived perpetual futures risk was "overblown." CME Chief Financial Officer Lynne Fitzpatrick is set to take over in March as chief executive officer. The company also sued the Commodity Futures Trading Commission and its Chairman Michael Selig over the regulator greenlighting perpetual futures tied to the price of cryptocurrencies. 
• Banks. UBS downgraded early-reporter Jefferies Financial Group Inc., saying good news was already priced into the stock ahead of earnings next week.