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• The Dow Jones took a meager step upward on Thursday, clawing into record highs.
• The tech sector is taking the biggest step, bolstered by the ongoing AI rally.
• The Fed’s rate cut and tease of more cuts to come has lifted investor sentiment.

The Dow Jones Industrial Average (DJIA) rose on renewed bullish sentiment across broader markets on Thursday, bolstered by the Federal Reserve’s (Fed) decision to cut interest rates for the first time in nine months. The tech rally has extended its legs, both on the hope that declining interest rates will reinvigorate business investment across the space, as well as a new investment pivot by major players in the AI segment.

The Dow Jones clipped into the 46,200 level after a volatile start to Thursday’s trading session. The major equity index has climbed into fresh record bids following a near-term spat of congestion, but it is now up nearly eight-tenths of one percent for the week. The Dow Jones is also in the green by one-and-a-half percent for September, and on pace for a fifth straight bullish monthly close.

Rate cuts and AI investment bolster indexes
 

The Fed’s quarter-point rate cut this week helped to bolster market confidence that equities will continue to bleed higher despite deep cracks beginning to surface in key macro datasets, suggesting that the US economy may be on shakier footing than previously believed. Weekly Initial Jobless Claims dipped to 231K, coming in below the expected 240K, and is a welcome reprieve from the steady flow of bad news around the labor market.

Still, not all is rosy in the underlying data: despite a slight easing in the 4-week average of Initial Jobless Claims to 240K, the rolling average is still a sight higher than it was at the beginning of the year when it was sitting in the 212K to 213K range.

AI tech rally giant Nvidia (NVDA) has announced a plan to invest $5 billion in lagging tech has-been Intel (INTC). Intel stock soared around 30% on Thursday, clipping above $31.50 per share, while Nvidia added 3.75% to test $176.70 per share. The investment will give Intel, a shadow of its former chip-dominant self, a second wind to try and re-enter the AI hardware arms race. However, this is not the first time that either Invidia or Intel has attempted to brute force a late entry into an already-populated market segment with fizzling results.

Dow Jones daily chart
 

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