Traders on the floor of the New York Stock Exchange witnessed a positive shift in futures trading on Thursday night. Both the Dow Jones Industrial Average and the S&P 500 showed promising signs, increasing by 112 points, or 0.2%, and nearly 0.1% respectively. Meanwhile, the Nasdaq 100 futures experienced a slight decline of less than 0.1%.
Despite a stellar performance that exceeded fourth-quarter expectations, chipmaker Broadcom faced a nearly 5% drop in extended trading. The company projected a significant increase in AI chip sales, suggesting they could double in the upcoming quarter. In contrast, Lululemon’s shares soared by 10% following the announcement that its CEO would step down at the end of January, a decision influenced by the company’s recent underperformance.
Investors shifted their focus on Thursday towards cyclical stocks, which are known to be more sensitive to economic fluctuations, while taking profits from growth-oriented stocks that are heavily associated with the artificial intelligence sector. This strategic move came on the heels of the Federal Reserve’s decision to cut interest rates for the third time this year, further fueling investor optimism.
In the prior session, both the Dow and S&P 500 achieved record highs, closing at impressive levels, while the Nasdaq Composite saw a dip of 0.3%, shaped by declines in major tech stocks such as Alphabet and Nvidia. The Dow enjoyed a robust day, climbing by 646 points, or 1.3%, significantly aided by a 6% surge in Visa as well as strong performances from Nike and UnitedHealth Group.
Chris Zaccarelli, chief investment officer at Northlight Asset Management, noted the potential for a broader market rally. He remarked, “The Dow had a great day and, if the trend continues, it could be the beginning of the broadening-out trade.” He emphasized that a continuation of the bull market relies on a wider market uptrend, independent of reliance on the so-called “Magnificent 7.” If this transition occurs, analysts believe the market could see sustained gains leading into the end of the year and into 2026.
Throughout the week, the S&P 500 reported an increase of 0.45%, while the Dow surged nearly 1.6%. The Nasdaq has lagged behind, boasting less than a 0.1% gain. Notably, small-capitalization stocks have outperformed their larger counterparts, with the Russell 2000 index climbing 2.7% this week and reaching a new all-time high on Thursday.
