U.S. inflation data lifts stocks, chips lead record rally

The S&P 500 cleared 7,800 points for the first time ever on Thursday after a second consecutive soft inflation print all but shut the door on a September rate hike, with semiconductors doing the heavy lifting.

Sandisk Corp. (NASDAQ: SNDK ) soared 15% after unveiling a new optimistic roadmap in its investor day.

The memory maker now expects roughly 80% non-GAAP gross margin, a 50% adjusted free-cash-flow margin and 100% return of excess cash. • State Street Technology Select Sector SPDR ETF shares are trending higher.

Why are XLK shares climbing? The macro story did the rest of the work.

Headline producer prices were flat in July against expectations for a 0.2% rise, and core PPI also undershot, echoing Wednesday’s cooler consumer inflation report that showed the annual rate easing to 3.4%.

Initial jobless claims rose to 209,000 for the week ended Aug.

8, up 9,000 from the prior week.

That combination pushed the odds of a Federal Reserve rate hike at the Sept.

16 FOMC meeting down to roughly 34% from about 55% a week ago, with the fed funds target sitting at 3.75%.

Traders have also largely faded the Hormuz headline risk this week, and crude is drifting lower as a result.

West Texas Intermediate slipped 1% to $82.43 a barrel by midday, while Brent fell 0.9% to $88.16, dipping below $87 intraday before recovering.

The S&P 500 rose 0.5% to 7,783.90, by midday trading.

The Dow Jones Industrial Average bucked the trend, easing 0.1% to 53,693.18, or down 77 points.

The Nasdaq 100 outperformed, climbing 0.9% to 30,012.45.

The Russell 2000 lagged the rally, adding 0.2% to 3,050.83.

Gold went the other way, sliding 1.1% to $4,361 an ounce as firmer risk appetite drained haven demand.

Thursday’s Performance In Major U.S.

Indices Index Last % Change S&P 500 7,783.90 +0.5% Dow Jones 53,693.18 -0.1% Nasdaq 100 30,012.45 +0.9% Russell 2000 3,050.83 +0.2% Updated by 12:15 PM ET According to the Pro platform: The Vanguard S&P 500 ETF (NYSE: VOO ) rose 0.5%.

The SPDR Dow Jones Industrial Average ETF Trust (NYSE: DIA ) slipped 0.1%.

The Invesco QQQ Trust (NASDAQ: QQQ ) climbed 0.9%.

The iShares Russell 2000 ETF (NYSE: IWM ) gained 0.2%.

Memory Mania Lifts Chips The Technology Select Sector SPDR Fund (NYSE: XLK ) led all sectors with a 1.1% gain, extending a month-to-date advance of 8.9%.

The Real Estate Select Sector SPDR Fund (NYSE: XLRE ) rose 1.1% and the Communication Services Select Sector SPDR Fund (NYSE: XLC ) added 1%, both benefiting from the retreat in yields.

At the industry level the split was stark.

The VanEck Semiconductor ETF (NASDAQ: SMH ) jumped 1.8%.

The iShares U.S.

Home Construction ETF (BATS: ITB ) rose 1.1% and the Vanguard Real Estate ETF (NASDAQ: VNQ ) added 1% as rates eased.

On the other side, the VanEck Gold Miners ETF (NYSE: GDX ) cratered 3.6% alongside the drop in bullion, and the SPDR S&P Metals & Mining ETF (NYSE: XME ) fell 1.3%.

Storage and memory names were the session’s clearest theme.

Western Digital Corp. (NASDAQ: WDC ) rallied 8.3% to $491.71 in sympathy with SanDisk’s 15% jump.

Micron Technology Inc. (NASDAQ: MU ) rose 5% and SK Hynix Inc. (NASDAQ: SKHY ) soared 8%.

Super Micro Computer Inc. (NASDAQ: SMCI ) advanced 7.6% to $40.47, a fourth straight session of gains since its Aug.

11 fiscal fourth-quarter report showed adjusted EPS of $1.70 against consensus near 96 cents and revenue of $11.1 billion, nearly double a year earlier.

Birkenstock Holding plc (NYSE: BIRK ) surged 14% to $41.89 after third-quarter revenue rose 15% in constant currency.

SOLV Energy, Inc. (NASDAQ: MWH ) jumped 8.3% to $32.59 after second-quarter revenue climbed 77% year over year to $951 million, adjusted EBITDA reached $117 million, backlog grew 44% to about $8.9 billion, and the company raised full-year guidance.

The losers’ table was dominated by earnings reactions.