NVIDIA continues to rise in influence on Wall Street, helping to keep US indices near record levels even with mixed economic reports. The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all saw gains on Thursday, with Nvidia leading with a 2.8% rise after surpassing Microsoft to become the most valuable company on Wall Street. Nvidia has been a major player in the stock market frenzy surrounding AI technology, with its chips driving the transition to AI and generating significant growth in productivity and profits. The company’s stock has risen 181.5% this year, following a tripling in value last year.
Despite challenges in the US economy, Nvidia and other AI winners have supported the stock market. Companies such as Winnebago Industries and Accenture have reported mixed earnings, with some falling short of expectations. However, super microcomputer, which sells storage systems and servers used in AI and other computing, saw strong gains, reflecting the power of AI in driving stock growth.
While the stock market has been propped up by AI technology, there are concerns about the reliance on a small number of high-growth companies. Market watchers favor a larger number of companies driving market growth. However, there is hope that a slowdown in the US economy could control inflationary pressures, leading to potential interest rate cuts by the Federal Reserve, which would benefit the economy and investment prices.
Treasuries yields have risen following mixed economic reports, including manufacturing growth and housing data. The 10-year Treasury yield increased to 4.27%, reflecting uncertain economic conditions. The Federal Reserve has indicated the possibility of interest rate cuts this year, while many traders expect more cuts than initially forecast.
Internationally, central banks are also adjusting interest rates, with the Swiss National Bank cutting its main rate. European stock indices rose in response to these changes, with the French CAC 40 gaining 1.3%. Asian indices remained mixed amid global economic uncertainty.
In summary, Nvidia’s continued rise on Wall Street, driven by its AI technology, highlights the stock market’s reliance on high-growth companies. Economic challenges, such as mixed reports and uncertainty around interest rates, are impacting market performance. The global economic landscape remains unpredictable, with central banks making adjustments to support financial stability.
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https://fortune.com/2024/06/20/nvidia-most-valuable-company-on-wall-street-buoying-indexes-to-record/