S&P 500, Nasdaq rise as US GDP data, chip stocks lift mood

US stocks rose on Thursday, setting the stage for new highs. Investors welcomed a series of updates, including solid U.S. economic data, upbeat earnings from Micron ( MU ) and China’s pledges of more stimulus as they waited to hear from Jerome Powell.

The Dow Jones Industrial Average (^DJI) rose 0.4%, while the S&P 500 (^GSPC) gained 0.5% after both indices declined from all-time highs in the previous session. The Nasdaq Composite (^IXIC) led the advance, rising about 1 percent on a strong rally in Micron shares.

Stocks look solidly positive again thanks to a triple dose of optimism for AI trade, the health of the US economy and China’s stimulus push, which could reverberate through US markets.

Nvidia ( NVDA ) supplier Micron raised its revenue forecast for the next quarter, citing strong demand for its memory chips used in AI data centers. Chip stocks Nvidia, AMD ( AMD ), ASML ( ASML ) and STMicro ( STM ) rose following the earnings report.

Also, a final update from the US government on second-quarter GDP growth beat Wall Street expectations, while weekly jobless claims unexpectedly fell to their lowest levels in four months.

Meanwhile, China’s top leaders have signaled they are backing away from reviving its moribund economy with new pledges to raise fiscal spending, stem the housing crisis and prop up the stock market. A big rally in mainland stocks has put the CSI 300 (000300.SS) on track for its best run in a decade.

Helping the upbeat mood were rising expectations for another jumbo interest rate cut from the Federal Reserve. Traders are pricing in a 60% chance of a 0.5% move at its November meeting, up from 40% a week ago.

Read more: What Fed rate cuts mean for bank accounts, CDs, loans and credit cards

Investors await Fed Chairman Powell’s statement later to test those hopes, the culmination of a parade of Fed speakers on Thursday. Their comments will set the stage for Friday’s highly anticipated reading of the PCE index, the Fed’s preferred measure of inflation.