27 minutes ago
HomeMarket NewsDow Jones, S&P 500 end at record highs after dovish Fed takes precedence over AI worries
A firm called Interactive Brokers expects the S&P 500 to stage a Santa Claus rally and break past the 7,000 mark this year itself. However, it has set a 2026-end target of just 6,500, projecting downside for the index, as it expects AI headwinds, a new Fed Chair, and midterm elections to weigh on the broader market index in the new year.
Two of the three benchmark indices on Wall Street ended higher, with one ending at a record high and the other registering a record closing high, as hopes of a more dovish Federal Reserve in 2026 overshadowed concerns surrounding the AI trade, which at one point, had pushed futures lower by as much as 400 points.
The Dow Jones ended 650 points higher on Thursday to close above the 48,700 mark, while the S&P 500 closed above the 6,900 mark for the first time. The index is now just 20 points away from its intraday record of 6,920. The tech-heavy Nasdaq, staged a 300-point recovery from the lows of the day, but ended below the flat line.
Thursday's session marked a rotation out of big tech names, most of which, barring Microsoft and Meta, ended lower, into old economy and defensive names such as Visa, which led the Dow higher.
Initial jobless claims, the only macro data point scheduled to be reported on Thursday, increased by 44,000 for the week that ended December 6 to 2.36 lakh, higher than the 2.2 lakh estimate.
Shares of Oracle Corp. fell 11% on Thursday, the most since January, after its results disappointed the street. Concerns over Oracle's debt burden continue as the cost to protect its debt from a default for five years rose to the highest level in 16 years. The stock is now down over 40% from its September peak.
The Oracle-led concerns were partly offset by Broadcom, whose results not only beat expectations, as did its guidance for the first quarter. CEO Hock Tan expects the AI chip sale to double in Q1 from last year. The stock though, is down 4.5% in extended trading, having gained 75% so far this year as of closing of regular trading on Thursday.
A firm called Interactive Brokers expects the S&P 500 to stage a Santa Claus rally and break past the 7,000 mark this year itself. However, it has set a 2026-end target of just 6,500, projecting downside for the index, as it expects AI headwinds, a new Fed Chair, and midterm elections to weigh on the broader market index in the new year. The note said that after three years of a strong bull market, there are "underappreciated risks".
Hopes of the Fed cutting rates has pushed the US Dollar index below the mark of 99, while Gold and Silver prices continued to surge higher. Silver is now headed towards the mark of $65 and are up nearly 120%, while Gold prices returned back above the mark of $4,300 and are up nearly 60% this year.
