• The Nasdaq Composite climbed about 1% on Thursday, extending gains as technology and growth stocks led the market higher.
  • The advance was broad-based, with the S&P 500 and Dow Jones Industrial Average also posting modest gains, driven by optimism around earnings and macroeconomic data.
  • Investors are closely watching upcoming inflation reports and Federal Reserve commentary for clues on the pace of monetary policy easing.

Tech Stocks Drive Market Higher

U.S. equities pushed higher in afternoon trading, with the Nasdaq Composite rising approximately 1% to lead the major indices. The S&P 500 added 0.4%, while the Dow gained 0.2%, as risk-on sentiment returned following a brief pullback earlier in the week.

The rally was fueled by strength in mega-cap technology shares, with Apple Inc., Microsoft Corp., and Nvidia Corp. all contributing to the Nasdaq's advance. Semiconductor stocks also rose, with the Philadelphia Semiconductor Index up 1.2%. according to traders who asked not to be identified discussing market movements.

"The market is rotating back into growth names as investors shake off concerns about valuation and focus on the earnings potential of AI-related companies," said a portfolio manager at a major asset manager. "We're seeing strong institutional flows into tech and semis."

The broader market gains come ahead of key economic data releases, including the Consumer Price Index and producer price index reports due next week. "If inflation comes in soft, that could cement expectations for a rate cut in September," the manager added.

Broader Market Context

The advance was not limited to technology. Consumer discretionary and industrials also saw buying interest, with Amazon.com Inc. and Caterpillar Inc. both rising more than 1%. Bond yields were little changed, with the 10-year Treasury yield hovering around 4.20%.

Investors are also monitoring geopolitical developments and their potential impact on supply chains.

"We're still in a wait-and-see mode," said a market strategist at a bank. "The market is pricing in a soft landing, but we need to see earnings confirm that narrative."

Correction: An earlier version of this article misstated the day's gain for the Dow. It is up 0.2%, not 0.3%.