S&P 500 Rallies as Investors Double Down on Chip Stocks By Investing.com

By Yasin Ebrahim

Investing.com – The S&P 500 closed higher Thursday as chip stocks and the strongest jobless claims report in decades triggered a sea of green on Wall Street.

The rose 1.4%, the gained 1.02%, or 349 points, the rose 1.93%.

Chip stocks (NASDAQ:) jumped more than 5%, led by Intel (NASDAQ:) and NVIDIA (NASDAQ:) after the latter’s chief executive Jensen Huang said the company would be interesting in using Intel to source its chips.

Some on Wall Street are skeptical, pointing out that Nvidia is unlikely to risk its competitive edge by allowing a rival to produce its chips. 

“[W]e see little likelihood that NVDA would choose to fab prominent products at arguably its most significant competitor’s facilities, a choice that would provide Intel with an early look at NVDA’s future chip design,” Wedbush said in a note.

The broader tech sector was also helped by ongoing strength in Meta Platforms Inc (NASDAQ:) after the social media giant confirmed plans to build a hyperscale data center in the north Kansas City area.

Sentiment on risk assets was also supported by data pointing to economic strength as jobless claims fell to their lowest level since 1969.

“It [the labor market] is extremely strong and this data is exactly the sort of evidence that has given the Fed confidence that they can raise rates more quickly to battle inflation,” Jefferies said in a note.

Fed officials have been backing Chairman Jerome Powell’s recent remarks hinting at the prospect of the 50-basis-point rate hikes at meetings later this year.  

, however, fell by a more than expected 2.2% last month, though economists were quick to downplay the weakness, estimating a rebound was likely ahead.

“It seems reasonable, given firms’ sky-high investment spending intentions, to think that March will see a clear rebound,” Pantheon Macroeconomics said.

The backdrop of stronger economic data offset rising geopolitical tensions as the U.S. and its allies look to further isolate Russia as the latter’s ongoing conflict with Ukraine rolls into the fifth week.   

Biden said the U.S. would respond if Russia uses chemical weapons in Ukraine, and called on Russia to be booted out of the G20.

Uber Technologies (NYSE:), meanwhile, surged almost 5% after the ride-sharing company said it struck a partnership to add New York taxis to its app.

On the meme stock front, GameStop (NYSE:) slashed its losses to end the day in the greed, keeping its winning streak alive.