Wall Street Rallies, S&P 500 at Record Closing High

Wall Street charged ahead Thursday, with the S&P 500 posting a record closing high, with the biggest boosts from technology and growth stocks on investor optimism about prospects for rate cuts from the Federal Reserve.

The Philadelphia Semiconductor index outperformed the broader market and hit a record high as investors continued to bet that chip companies would benefit from increasing demand related to artificial intelligence.

In Washington, Fed Chair Jerome Powell told a U.S. Senate committee that the U.S. central bank is "not far" from being confident inflation is declining toward the 2% target, which would make rate cuts possible.

His comments reinforced investor hopes for a first rate cut in June and boosted equity indexes that had faltered in the days leading up to his Congressional testimonies, which kicked off on Wednesday with an appearance before the U.S. House Financial Services Committee.

Also the number of Americans filing new claims for unemployment benefits was unchanged as the labor market continued to ease, Labor Department data showed.

This followed private payrolls, job openings, quit rate and unemployment claims data that gave investors a picture of a jobs market that was softening but still solid.

Powell "essentially left rate cuts on the table for this year. That's what markets wanted to hear," said Anthony Saglimbene, Chief Market Strategist, Ameriprise Financial.

"The market's also responding well to the employment data we've had so far this week," he said. "It adds to the narrative that we're starting to see employment slow but still solid."

But Saglimbene noted investors will still anxiously monitor the nonfarm payrolls report on Friday for further details on the labor market.

According to preliminary data, the S&P 500 gained 52.60 points, or 1.04%, to end at 5,157.99 points, while the Nasdaq Composite gained 241.86 points, or 1.51%, to 16,273.41. The Dow Jones Industrial Average rose 127.58 points, or 0.33%, to 38,788.63.

"Everybody is waiting for something bad to happen but nothing bad has happened to the economy, markets, earnings and policy," said John Augustine, chief investment officer at Huntington Private Bank. "That's why we're building momentum."

Shares in lingerie retailer Victoria's Secret & Co fell sharply on a weak annual forecast.

Kroger Co. shares rallied after the grocer forecast annual sales and profit largely above Wall Street estimates as it bet on higher demand for groceries at its stores, tighter cost control and strength in its private-label brands.