NEW YORK, Jan. 18 (Xinhua) -- U.S. stocks ended higher on Thursday, fueled by AI optimism that sent chip stocks soaring, while concerns about potential interest rate cuts weighed down utilities and real estate shares.
The Dow Jones Industrial Average rose 201.94 points, or 0.54 percent, to 37,468.61. The S&P 500 added 41.73 points, or 0.88 percent, to 4,780.94. The Nasdaq Composite Index increased by 200.03 points, or 1.35 percent, to 15,055.65.
Seven of the 11 primary S&P 500 sectors ended in green, with technology and communication services leading the gainers by adding 2.03 percent and 1.38 percent, respectively. Meanwhile, utilities and real estate led the laggards by dropping 1.05 percent and 0.61 percent, respectively.
The rally was led by Taiwan Semiconductor Manufacturing Company (TSMC), the world's largest contract chipmaker, whose shares jumped after it projected 2024 revenue growth of more than 20 percent. This strong outlook reflects the booming demand for high-end chips used in AI applications.
Heavyweight chipmaker Nvidia also hit a record high, becoming the most-traded company on Wall Street with over 24 billion U.S. dollars worth of shares exchanged. Rival Advanced Micro Devices (AMD) and other chipmakers like Broadcom, Qualcomm, and Marvell Technology also gained, pushing the Philadelphia SE semiconductor index closer to its December 2023 record.
Adding to the positive sentiment, Apple's stock jumped after Bank of America Global Research upgraded the iPhone maker's stock to "buy" from "neutral." This helped the S&P 500 information technology index reach a record high.
While the tech sector led the charge, other sectors were more subdued. Utilities and real estate companies fell on concerns that the Federal Reserve might not be as quick to cut interest rates as some investors had hoped.
As for the economy, U.S. residential starts fell 4.3 percent in December to a 1.46 million annualized rate, according to government data. Building permits, which indicate future construction activity, increased to a 1.50 million pace.
Atlanta Federal Reserve President Raphael Bostic said he expects the central bank to start implementing rate cuts in the third quarter of this year, as long as the current economic conditions hold steady, "but the evidence would need to be convincing."
