US Stocks Reach New Heights as Nasdaq and S&P 500 Set New Records, Dow Surpasses 50,000 Mark

Market Rally Continues as AI Trade Fuels Momentum

The US stock market continued its record-breaking rally on Thursday, with all three major indices firmly in the green. The Dow Jones Industrial Average reclaimed the 50,000 mark, while the S&P 500 closed above 7,500 for the first time ever. The Nasdaq also touched a fresh all-time intraday high, driven by a surge in equities from this year's lows.

The rally in equities has been fueled by a revival of the artificial-intelligence trade, with Nvidia Corp. experiencing a seven-day gain that has pushed its value close to $6 trillion. Other companies have also seen significant gains, including Cisco Systems Inc., which saw its shares lifted by 13% following a solid outlook. Additionally, Ford Motor Co. has seen a surge in its shares due to AI-hype, while Cerebras Systems Inc. jumped 68% in its debut.

Despite some volatility, the overall market sentiment remains positive, driven by renewed AI wagers, solid corporate profits, and signs of economic resilience. A report showed that retail sales rose for a third month, exceeding estimates. Control-group sales, which feed into the calculation of goods spending for quarterly gross domestic product, also exceeded expectations.

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Retail Sales Growth

The growth in retail sales is a sign of consumer strength, despite a war-driven surge in energy costs. However, the tech sector remains in the driver's seat, according to eToro's Bret Kenwell. Veteran strategist Louis Navellier also notes that the best defense in uncertain times is a strong offense of fundamentally superior stocks.

The earnings of companies in the data center and AI-related sectors are expected to be even stronger in the upcoming quarter, driven by growing order backlogs. This has offset concerns that higher energy costs could fuel inflation and weigh on consumer confidence. First-quarter S&P 500 profits likely grew about 27% from a year ago, marking a sixth straight quarter of double-digit expansion.

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Corporate America has become skilled at adapting to a wide range of economic environments, according to Clark Bellin at Bellwether Wealth. For investors who missed the opportunity to put new money to work during the war-driven slide in March, it's not too late to join the rally. Stocks are still climbing the wall of worry, and there is still plenty of skepticism, which suggests this bull market has more room to run.

The relative stability in oil prices has also helped sentiment, following US President Donald Trump's signal that China is willing to support negotiations with Iran. The pound fell as Andy Burnham secured a path to challenge Keir Starmer for the UK prime minister's job. Bitcoin topped $80,000 after the Senate Banking Committee advanced a landmark US digital asset market structure bill.