S&P 500 and Nasdaq soar to record highs as Nvidia leads tech rally

S&P 500 and Nasdaq soar to record highs as Nvidia leads tech rally

The U.S. stock market closed at record levels on Thursday, boosted by a surge in Nvidia shares after the chipmaker reported strong quarterly earnings. The S&P 500 and the Nasdaq Composite posted their best day since early 2023, while the Dow Jones Industrial Average also reached a new peak.

Nvidia jumped 16%, adding more than $100 billion to its market value, as it beat analysts’ expectations on both revenue and profit. The company also announced a four-for-one stock split, which could make its shares more accessible to individual investors. Nvidia’s results lifted the entire semiconductor sector, which has been facing supply constraints amid high demand.

Traders on the floor of the NYSE, July 6, 2023.

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The tech rally also lifted other major names, such as Apple, Microsoft, Amazon, and Facebook, which all gained more than 2%. The Nasdaq Composite climbed 2.96%, closing at 16,039.77, just shy of its intraday record of 16,057.44, set in November 2021. The S&P 500 rose 2.11%, ending at 4,567.04, surpassing its previous closing high of 4,549.18, also from November 2021.
The Dow Jones Industrial Average advanced 1.18%, finishing at 35,754.88, breaking its prior record close of 35,677.16, from earlier this month. The 30-stock index was led by Boeing, Caterpillar, and Chevron, which all rose more than 3%.

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“This is a very constructive breakout,” said Larry Tentarelli, chief technical strategist at the Blue Chip Daily Trend Report. “Blockbuster earnings from tech giant Nvidia sparked the rally, but many sectors contributed.”

Indeed, 10 of the 11 S&P sectors were positive Thursday, with utilities being the sole loser. Industrials and health care closed at fresh records.

All three major averages are also now on track for winning weeks: The S&P 500 is pacing for a 1.6% advance, while the Nasdaq has gained 1.7%. The Dow is up 1.1% for the period.

Investors will now look to quarterly results from Warner Bros Discovery and Bloomin’ Brands before the opening bell on Friday. They will also await the minutes from the Federal Reserve’s January meeting, seeking further insight on where the central bank stands on rates. This comes on the back of hotter-than-expected economic data the previous week.

In after-hours trading, Block soared more than 11% after fourth-quarter revenue surpassed Wall Street estimates. Carvana climbed nearly 20% after the used car retailer said it expects retail units to grow in 2024.

 

The gap between the stock market and the real economy has also posed a challenge for Prime Minister Fumio Kishida, who took office in October and has pledged to create a “virtuous cycle” of higher wages, higher inflation, and higher growth. He has urged Japan’s top companies to offer record pay hikes this year, but it remains to be seen whether that will boost consumer sentiment and spending.

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Source : CNBC

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