Tech Stocks Rally Amid Fed's Rate Projections

The S&P 500 and Nasdaq saw modest gains as technology stocks rallied despite the Federal Reserve's projection of only one interest rate cut this year. Broadcom's shares soared due to its upbeat revenue forecast and stock split announcement. Nevertheless, concerns about rapid economic slowdown persist.

The S&P 500 and Nasdaq edged higher on Thursday afternoon as technology shares rallied, but gains were subdued a day after the Federal Reserve projected only one interest rate cut this year.

The number of Americans filing new claims for unemployment benefits increased last week and another report showed producer prices unexpectedly fell in May, helping to keep alive hopes of a September rate cut. Both the S&P 500 technology sector and an index of semiconductors rose more than 1%.

Shares of Broadcom jumped 12.2% and hit a record high after the chipmaker raised its forecast for revenue from semiconductors used in artificial intelligence technology. It also announced a 10-for-1 forward stock split. "You've got good news from tech and good news on the inflation front ... but in the near term we should get some consolidation, which would be good," said Larry Tentarelli, founder of Blue Chip Daily Trend Report, a research publication. "Longer term, the up trend is pretty strong."

The Dow Jones Industrial Average fell 87.69 points, or 0.23%, to 38,624.52. The S&P 500 rose 5.59 points, or 0.10%, to 5,426.62 and the Nasdaq Composite climbed 40.98 points, or 0.23%, to 17,649.42. If the S&P 500 and Nasdaq end firmer, it would be their fourth straight day of all-time closing highs.

The Fed on Wednesday projected only one rate cut this year. Its March projections included three quarter-percentage-point reductions. UBS Global Research said it now expects the Fed to cut rates in December instead of September, while Goldman Sachs and Morgan Stanley continue to expect the first cut in September.

Still, some investors are wondering whether the economy is slowing too quickly. The industrials index was down 0.8%.

Declining issues outnumbered advancers on the NYSE by a 1.76-to-1 ratio; on Nasdaq, a 2.06-to-1 ratio favored decliners. The S&P 500 posted 13 new 52-week highs and nine new lows; the Nasdaq Composite recorded 46 new highs and 113 new lows.

(Additional reporting by Lisa Mattackal and Johann M Cherian in Bengaluru; Editing by Devika Syamnath and Richard Chang)

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)