Tech Outperformance Boosts Index to Record High

Major U.S. equities indexes jumped higher as a report showed private employers added fewer jobs than expected in May.

The S&P 500 gained 1.2%, reaching the highest closing level in the history of the benchmark index. Outperformance from the sector helped boost the Nasdaq, which surged 2.0%, while the Dow closed Wednesday’s session 0.3% higher.

The technology sector led the way as the slower pace of hiring seen in the private payroll report renewed confidence that interest rates are forthcoming. Traders’ confidence in turn boosted semiconductor stocks, which stand to benefit if borrowing costs move lower.

In addition, reports that Taiwan Semiconductor Manufacturing Company (TSM) would take delivery of an advanced chipmaking machine from ASML Holding (ASML) helped lift optimism about AI-driven semiconductor demand.

Shares of semiconductor behemoth Nvidia (NVDA) soared 5.16% to a record high and its market cap crossed $3 trillion. Nvidia was far from the only chipmaker to post gains. Shares of semiconductor device manufacturer Broadcom (AVGO) added 6.2%, while shares of memory and storage chipmaker Micron Technology (MU) gained 5.6%.

However, it was Hewlett Packard Enterprise (HPE) that had the biggest gain in the S&P 500 Wednesday. The information technology provider’s stock surged 10.7% to an all-time high after posting better-than-expected quarterly sales and profit results. Revenue from artificial intelligence (AI) systems more than doubled quarter over quarter, driven by robust demand for AI servers, which prompted the firm to boost its full-year forecasts.

Moderna (MRNA) shares added 6.5% after the biotech firm posted positive data from a clinical trial of its experimental skin cancer vaccine. The trial involved the administration of Moderna’s formula in combination with Keytruda, an anti-PD-1 therapy developed by Merck (MRK). Merch shares ticked 0.6% higher on the day.

Shares of Brown-Forman (BF.B) tumbled 5.9%, marking the weakest daily performance in the S&P 500, after the spirits maker reported a year-over-year decline in revenue. Slumping demand for Jack Daniel’s Tennessee Whiskey, the company’s top-selling brand, weighed on the results.

Dollar Tree (DLTR) shares dropped 4.9% after the discount retailer missed quarterly profit estimates and said it was considering a sale or spinoff of its Family Dollar brand. In early April, a tornado destroyed a Dollar Tree distribution center in Oklahoma, causing significant losses of inventory and equipment.

Shares of fertilizer provider CF Industries (CF) slipped 4.6% amid a significant increase in natural gas futures prices. The company remains highly dependent on the price of the commodity because natural gas is a key feedstock in the nitrogen production process.