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Market Rallies as Strong Economic Data Boosts Investor Confidence

Market sentiments improved on strong U.S. economic data, with major indices closing higher, indicating a positive outlook for stocks. The S&P 500 rallied 1.00% as chip stocks gained support from the overall market.

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AI Rating:   7

Market Performance Overview

The S&P 500 Index, Nasdaq 100, and Dow Jones Industrials all closed higher, propelled by gains in the chip sector and positive economic indicators. Specifically, December housing starts exceeded expectations, indicating a strong housing market. The strength shown in chip stocks underpinned the market rally.

Key Economic Indicators

December housing starts rose +15.8% m/m to 1.499 million, surpassing expectations of 1.327 million. Moreover, manufacturing production increased by +0.6% m/m against a forecast of +0.2% m/m, showcasing robust manufacturing activity.

Earnings Growth Outlook

As the earnings season begins, analysts expect S&P 500 earnings to grow by 7.5% in Q4, which is the second-highest forecast in the last three years. Such expectations likely contribute to a more optimistic investor sentiment.

Caveats in Sentiment

Despite the positive economic indicators, Cleveland Fed President Hammack's comments about persistent inflation and the Fed's patience regarding interest rate cuts introduced a note of caution.

Company Highlights

Chip manufacturers such as Marvell Technology (MRVL), GlobalFoundries (GFS), and others surged in stock price due to favorable market conditions. Additionally, companies like Intel (INTC) and Qorvo (QRVO) reported significant increases in their stock prices, benefiting from acquisition rumors and strategic investment.

Stocks:  SPX DOWI IUXX MRVL GFS AVGO MCHP NVDA MU QCOM AMD ON NXPI TXN COIN MSTR MARA RIOT INTC QRVO SLB TFC AMAT NET JBHT WBA STT VST CRWD RF GM HUBS