• The Nasdaq Composite closed at a record high, fueled by growing expectations for Federal Reserve rate cuts following soft economic data.
  • Tech and semiconductor stocks led the charge, with Nebius Group surging nearly 50% on an AI partnership with Microsoft.
  • All three major U.S. indexes—the Nasdaq, S&P 500, and Dow Jones—closed at simultaneous record highs, extending a September rally.

The Nasdaq Composite surged to an intraday record high on Thursday, closing up 0.37% at 21,879.49, as a wave of investor optimism swept through equity markets. The rally, which also propelled the S&P 500 and Dow Jones to new closing peaks, was underpinned by mounting bets that the Federal Reserve will soon ease monetary policy.

The bullish sentiment follows a series of economic data prints that suggest the economy is cooling. Downward revisions to payroll data reflecting weaker job growth, coupled with softer inflation readings, have solidified the market's view that the central bank has room to cut interest rates without overheating the economy. This environment, characterized by slowing growth and receding price pressures, is historically supportive of higher equity valuations, particularly for growth-oriented tech stocks.

Tech and semiconductor shares were clear outperformers. Nebius Group, a lesser-known player, saw its stock skyrocket nearly 50% after it announced a significant artificial intelligence infrastructure partnership with Microsoft. The deal sparked a broader rally in AI-adjacent names. Semiconductor giants, including Broadcom, ARM, Nvidia, TSMC, and AMD, also posted sharp gains. The sector's momentum was initially fueled by strong earnings from Oracle, which boosted confidence in cloud and data center spending, though Synopsys missed analyst expectations.

“The market is increasingly convinced that the Fed’s next move is a cut, and that’s the primary fuel for this rally,” said one trader, who asked not to be named because they were not authorized to speak publicly. “You combine that with still-strong narratives around AI and semiconductors, and you get these kinds of record-breaking days.”

Healthcare also contributed to the broad-based advance, with UnitedHealth Group among the key gainers. The simultaneous record closes for all three major indexes are a relatively rare event, highlighting the depth of the current risk-on appetite.

Attention now turns to upcoming Consumer Price Index (CPI) and Producer Price Index (PPI) reports. According to people familiar with market positioning, traders are looking for confirmation that inflationary pressures remain subdued. Any significant upside surprise could quickly undermine the narrative driving the current rally. For now, however, the path of least resistance appears to be higher as investors bank on a friendly Fed and resilient corporate earnings.