The S&P 500 and Nasdaq Composite achieved new records in early trading on Thursday thanks to Nvidia’s strong earnings. Nvidia shares surged more than 8% to exceed $1,000 for the first time after beating Wall Street’s expectations for first-quarter earnings. This led to optimism that the AI rally still has room to grow. As a result, other chipmakers and AI-related stocks also saw gains, with server manufacturers Dell and Super Micro Computer rising about 6% and 5%, respectively.
The market was able to set aside concerns about rising interest rates, which had caused losses the previous day, after Nvidia’s positive results. The S&P Global Purchasing Managers’ Index for May came in higher than expected, indicating accelerated business activity despite efforts by the Federal Reserve to curb price pressures. Additionally, cloud-based analytics company Snowflake and media giant News Corp. received boosts from positive news related to AI technology.
The S&P 500 and Nasdaq Composite hit intraday highs in early trading following Nvidia’s outstanding quarterly performance. Despite these gains, the S&P 500 reduced its earlier gains after the PMI showed an acceleration of business activity. Treasury bond yields also rose, putting pressure on the stock market. Technology and communications services stocks led the gains, with the Dow Jones Industrial Average falling slightly.
Overall, Nvidia’s strong earnings report and positive outlook for AI demand contributed to market optimism and record highs for major indices. Despite concerns about interest rates and inflation, the positive corporate results and economic data helped lift investor sentiment. The AI sector continues to show promise as companies leverage technology to drive growth and innovation in various industries.
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