Tech rally propels Wall Street stocks to record highs 

US stocks soared to new records on Thursday, powered by a rally in technology names that had been pummelled in recent sessions.

The blue-chip S&P 500 had risen 1.6 per cent to a new all-time high by lunchtime in New York, while the tech-heavy Nasdaq Composite jumped 2.8 per cent and the Dow Jones Industrial Average extended a peak hit a day earlier.

Those gains marked the latest large swings for the Nasdaq, which has fluctuated in recent sessions as traders assess the outlook for stock market favourites such as Tesla, Amazon and Apple, which have prospered during the pandemic. Tesla shares were up almost 4 per cent, while Amazon and Apple gained about 2 per cent.

Moves in the US government bond market have had a large effect on rapidly growing tech companies, since higher interest rates dent the value today of future cash flows. The 10-year Treasury yield steadied at about 1.52 per cent on Thursday, having peaked above 1.62 per cent earlier this month.

“Speculative tech may well generate outsized long-term gains . . . but they are at risk to wild valuation swings as sentiment toward tech shifts or the attractiveness of other assets increases,” said Dennis DeBusschere, a senior managing director at Evercore ISI.

The Nasdaq’s rally also suggested that investors were looking past a cyclical reopening trade that had shifted attention to companies expected to benefit from the ending of social curbs.

“If you believe that those [tech] firms have a lesser role to play going forward, then maybe you want to take your tech stock chips off the table,” said Johan Grahn, head of ETF strategy at Allianz Investment Management. “I find that, for me, that’s difficult to see.”

Helping to bolster sentiment was an uneventful $24bn auction of 30-year Treasuries, which calmed market jitters. Investors had been on edge after what Ian Lyngen at BMO Capital Markets said was an “uninspired” 10-year auction on Wednesday. The $38bn sale saw lacklustre demand, although it was far more solid than the poorly bid seven-year auction that roiled markets late last month.

Investors were also weighing jobs data released on Thursday morning showing that US unemployment claims last week had fallen to their lowest levels since November, declining more than analysts had forecast.

This week’s weakness in the US dollar continued, with the currency falling 0.5 per cent against a basket of peers. Oil hovered near a 14-month high after Brent crude, the international benchmark, gained 2.3 per cent to $69.49 per barrel.