Russell 2000 index hits record high, up 1.25%: U.S. stock market surges as small caps lead the broad rally - Dow also rises on stronger GDP

U.S. stock market surges as Russell 2000 hits record and small caps lead broad rally: The Russell 2000 index, a critical barometer for domestic small-cap health, led the charge with a 1.25% gain to hit 2,731.77. Simultaneously, the Dow Jones Industrial Average climbed 435 points, or 0.89%, to a historic 49,512.87. Investor sentiment turned overwhelmingly positive after the Commerce Department revised third-quarter GDP growth upward to a robust 4.4%, surpassing the anticipated 4.3%.

Inflation indicators remained stable, with the core Personal Consumption Expenditures (PCE) index—the Federal Reserve's preferred metric—rising 2.9% in line with expectations. Labor market strength further bolstered the rally, as weekly jobless claims came in at a lean 200,000, undershooting the 205,000 forecast. This "Goldilocks" scenario of high growth and predictable inflation sent the S&P 500 up 0.70% to 6,924.01, while the tech-heavy Nasdaq Composite jumped 1.03% to 23,463.04.

Trading volume surged nearly 16% on the Nasdaq compared to Wednesday, signaling heavy institutional participation in this record-breaking session.


The Commerce Department revised third-quarter U.S. GDP growth higher to 4.4%, above expectations of 4.3%, reinforcing confidence that the economy remains resilient despite high interest rates. Weekly jobless claims rose modestly to 200,000, below forecasts, signaling a labor market that is cooling gradually rather than cracking.

Together, the data pushed Treasury yields slightly higher and gave equity investors room to lean into risk. By mid-morning, the Dow was up nearly 0.7%, the S&P 500 gained around 0.5%, and the Nasdaq climbed close to 0.8%, with trading volumes running above recent averages.

This rally unfolded against a complex global backdrop. Investors remain alert to developments involving Iran, Israel, and the United States, where heightened military and diplomatic tensions have added uncertainty to energy markets and inflation expectations.

While oil prices eased on Thursday, traders continue to price in the risk of supply disruptions should the regional situation escalate. For now, stronger U.S. economic data helped keep markets focused on domestic fundamentals rather than global shocks.

Dow, S&P 500 and Nasdaq rise as GDP boosts confidence

The Dow Jones Industrial Average extended gains through the session, lifted by strength in industrials, healthcare, and select consumer names. The index traded near 49,500, up almost 0.9%, reflecting broad participation across blue-chip stocks. The S&P 500 briefly touched a session high near 6,930 before settling slightly lower, still up about 0.7%. The Nasdaq Composite outperformed on a percentage basis, rising more than 1% at its peak, supported by semiconductors and software stocks.

In fixed income, the 10-year Treasury yield edged up to around 4.27%, reflecting optimism about growth alongside expectations that the Federal Reserve will remain cautious on rate cuts. Commodity markets were mixed. Gold prices moved higher, extending recent gains, while silver surged nearly 3%. Oil prices slipped below $60 a barrel, easing some inflation concerns, even as geopolitical risks lingered.

Small caps outperform as risk appetite strengthens across equities

The leadership from the Russell 2000 reinforced a growing theme of rotation rather than narrow concentration. Financials, industrials, and select healthcare names provided steady upside, while speculative interest returned to high-beta pockets of the market.

Bitcoin slipped more than 1%, signaling that some capital rotated out of digital assets and back into equities. Precious metals moved the other way. Gold rose about 0.8%, while silver surged nearly 3%, continuing its sharp recent advance and outperforming most asset classes on the day.

In commodities, energy prices softened. WTI crude fell toward $59.60 a barrel, and Brent crude eased near $63, reflecting ample supply and muted near-term demand signals. Natural gas was a notable exception, jumping more than 4% on tightening inventory expectations.

This cross-asset setup supported equity volatility compression and encouraged traders to add exposure, particularly in small-cap and mid-cap stocks that had lagged earlier in the cycle.

Amgen sets new high as biotech stocks outperform

Healthcare stocks delivered mixed results, but Amgen stood out as a clear winner. Shares of the biotech giant rose nearly 2%, reaching a fresh all-time high near $350. The stock broke out of a multi-week consolidation, signaling renewed investor confidence ahead of its upcoming earnings report scheduled for early February. Amgen has benefited from steady demand for its core oncology and inflammation treatments, as well as optimism around its pipeline and cost discipline.

The broader biotech sector also outperformed. The SPDR S&P Biotech ETF gained roughly 2.5%, easily beating the major indexes. Investors have been selectively returning to biotechnology as valuations stabilize and expectations improve for regulatory approvals and merger activity in 2026.

Abbott Laboratories, however, moved sharply in the opposite direction. The diversified healthcare company saw its shares plunge more than 7% after reporting quarterly results that fell short of Wall Street expectations. Weakness in diagnostics and cautious guidance weighed on sentiment. Abbott’s stock is now down double digits for the month and has slipped to levels last seen in mid-2024, underperforming both the healthcare sector and the broader market.

Megacap tech stocks join the rally

Large technology stocks added momentum to Thursday’s market advance. Meta Platforms jumped more than 3%, leading gains among megacaps, even as analysts remain cautious ahead of its upcoming earnings report. The company continues to spend heavily on artificial intelligence infrastructure, which has pressured near-term margins but is viewed as critical for long-term growth across its advertising and social platforms.

Nvidia and Tesla also extended recent rebounds. Nvidia rose about 1%, building on a strong prior session as investors watched closely to see if the stock can reclaim key technical levels. Tesla gained modestly as well, with traders focusing on delivery trends and margin outlook amid a competitive electric-vehicle market.

Elsewhere in the Nasdaq 100, Arm Holdings and Datadog posted strong gains, reflecting ongoing enthusiasm for semiconductor design and cloud software. Intel and Netflix lagged, both slipping slightly as investors rotated toward faster-growing names.

Markets balance strong data with global risks

Macro data provided a supportive backdrop. The Commerce Department revised third-quarter GDP growth up to 4.4%, slightly above expectations. Core PCE inflation rose 2.9%, matching forecasts and reinforcing the view that price pressures remain contained. Weekly jobless claims came in at 200,000, below consensus estimates.

Treasury yields edged higher, with the 10-year yield near 4.27%, but the move failed to disrupt equity momentum. In ETF trading, the Invesco QQQ Trust and the SPDR S&P 500 ETF Trust both advanced about 0.4%, confirming broad participation.

FAQs:

Q: What factors pushed U.S. stock markets higher in today’s session?

A: U.S. stocks rose after third-quarter GDP was revised up to 4.4%, beating expectations. Weekly jobless claims came in at 200,000, below forecasts. These data points reinforced confidence in economic resilience despite high interest rates. Strong megacap and healthcare gains added further support.

Q: Why did Amgen surge while Abbott shares fell sharply?

A: Amgen climbed to record highs after breaking out above key technical levels ahead of its Feb. 3 earnings. Investors remain optimistic about its core biotech portfolio. Abbott fell more than 7% after quarterly results missed expectations, with weakness in diagnostics and cautious guidance pressuring the stock.