S&P 500, Dow rally to new records after Nvidia’s record-breaking results | Viral Trending Updates

S&P 500, Dow rally to new records after Nvidia’s record-breaking results | Viral Trending Updates

Both the S&P 500 and Dow Jones Industrial Average reached new all-time highs on Thursday, buoyed by record-breaking results from chipmaker Nvidia that set off a rally in other technology companies. 

The S&P 500 rose 2.1% Thursday to a fresh record, while the tech-heavy Nasdaq added 3%. The Dow, which has a smaller weighting in tech stocks, rose 1.1%, marking its first close above 39,000.

Nvidia, a central player in the boom surrounding artificial intelligence technology, reported scorching demand for its semiconductors when it released its quarterly earnings on Wednesday. Nvidia’s stock price jumped more than 16% on Thursday, adding $273 billion to its market valuation in a single day, beating the previous record one-day jump when Meta gained $205 billion on Feb. 2 of this year. 

“Today’s record-breaking stock market is due to both the future promise of AI and the record-breaking results that the poster child for AI – Nvidia – reported in the here and now,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, in an email. 

He added, “As we’ve been saying for the past 12 months, as long as the economy keeps expanding, it’s really hard to interrupt a bull market.”

The S&P 500 has gained more than 7% since year start, while the Nasdaq has jumped 8.6%. The Dow, meanwhile, has gained 3.6% over the same period.

Tech stock rally

Technology stocks have been the driving force behind the market’s rally that started in October. Solid earnings from some of the biggest names in the sector are helping justify and reinforce those big gains, with Nvidia’s quarterly report on Wednesday giving a lift to other tech stocks. 

Synopsis, which makes software used to test and develop chips, rose 7.1% after raising its profit forecast. Other chipmakers and companies involved in the chipmaking industry gained ground. Advanced Micro Devices rose 11.4% and Lam Research rose 4.8%.

“Investors are still wondering, will the market top out or broaden out,” said Sam Stovall, chief investment strategist at CFRA. “As of now, investors are basically saying, ‘I’m going to let this market take me where it wants to go, and right now that’s higher’.”

Wall Street expects just under 4% growth for earnings in the overall S&P 500 during the fourth quarter. The communication services sector, which includes Google’s parent Alphabet, is expected to report 45% growth. Information technology companies, which include Nvidia, are expected to notch 22% growth.

“The near-term momentum in AI-related stocks is likely to continue,” said Solita Marcelli, chief investment officer for the Americas at UBS Global Wealth Management.

Mixed economic data

Wall Street’s focus on earnings this week follows economic data from the previous week that prompted a stumble in the market. Inflation data came in hotter than Wall Street expected, while retail sales fell more than anticipated. That raised concerns about the timing of hoped-for interest rate cuts from the Federal Reserve.

Wall Street is now betting that the central bank will start trimming its benchmark rate in June, rather than March.

Investors could get more clarity on inflation next week when the government releases its monthly report on personal consumption and expenditures. It’s the Fed’s preferred measure of inflation as it tries to tame inflation back to 2%. Analysts expect that report to show inflation cooled to 2.3% in January. It peaked at 7.1% in June of 2022.

Nearly 90% of companies in the S&P 500 have reported earnings. There are still a few big names on deck this week. Online travel giant Booking Holdings and TurboTax maker Intuit will report later Thursday.

On the losing end in Thursday trading, electric truck and SUV maker Rivian tumbled 26.1% after it reported another loss and issued a weaker-than-expected production outlook. Lucid, another electric vehicle manufacturer, slid 16.1% after it missed Wall Street sales forecast and also gave a weaker production estimate than analysts had called for.

Online craft marketplace Etsy fell 8.5% after it missed Wall Street’s profit forecast by a wide margin.

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