A good day for 401(k)s: S&P 500 and Dow hit new highs as Nvidia fervor takes hold of Wall Street
By Nicole Goodkind, CNN
New York (CNN) — US stocks soared to new highs on Thursday after Nvidia, the third largest company on Wall Street, blew past earnings expectations and bolstered investor optimism on Wall Street.
The S&P 500 and Dow Jones Industrial Average both notched new record highs and the tech-heavy Nasdaq was within striking distance of its own all-time high, reached in November 2021.
The Dow ended the day 457 points, or 1.2%, higher. The S&P 500 gained 2.1%, and the tech-heavy Nasdaq Composite was 3% higher.
Both the S&P 500 and Nasdaq recorded their best days in over a year and the Dow surpassed the 39,000 level for the first time.
Nvidia (NVDA) also reached a new record high, popping 16.4% after reporting extraordinary earnings growth, fueled by the artificial intelligence boom.
The company gained $277 billion in value on Thursday alone, marking the largest-ever increase in a trading session.
Nvidia, a chipmaker whose technology is used to power AI, mentioned the term 67 times before taking any questions during its earnings call Wednesday.
Nvidia CEO Jensen Huang said in a statement on Wednesday evening that generative AI has now “hit the tipping point,” and that he expects more growth ahead. “Demand is surging worldwide across companies, industries and nations,” he said.
The California-based firm has seen its take-home income grow 769% year-over-year and the company’s full-year profits are up more than 580% from the year earlier.
Other chipmakers benefited from Nvidia’s good news. Shares of AMD (AMD) were 10.7% higher on Thursday morning and Microsoft (MSFT) was 2.4% higher.
Tech stocks also enjoyed a boost. Meta and Amazon were up 3.9% and 3.6%, respectively, and shares of Apple were 1.1% higher.
But some companies were left out of the fun: Intel, which laid out its plans to compete with Nvidia during a conference on Wednesday, fell by 1.1%.
The Nvidia-led rally has put worries about the Federal Reserve keeping interest rates higher for longer on the backburner for now, but traders got some disappointing news on Wednesday.
Fed officials continue to worry that inflation could remain stubbornly elevated during their policy meeting last month, minutes released yesterday afternoon showed. That could keep interest rates at 23-year high for longer than previously expected, affecting Americans’ borrowing costs on everything from car loans to mortgages.
Traders now largely expect the Fed to begin cutting rates in June or July, rather than at its May policy meeting, according to the CME FedWatch Tool.
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