Both the S&P 500 and the Dow Jones Industrial Average soared on Thursday as investors rushed into growth and tech stocks following strong earnings and prospects from artificial intelligence leader Nvidia. It closed at an all-time high.
Nvidia shares soared 16% after the chip designer predicted first-quarter revenue would soar nearly three-fold due to strong demand for AI chips and beat fourth-quarter revenue forecasts. The total amount was $785.38.
This pushed the benchmark S&P 500 index up more than 2% to a record high of 5,087 points. The Dow Jones Industrial Average also rose 456 points (1.2%) to more than $39,000, a record high. The Nasdaq Composite soared 3%.
Nvidia’s results were a major test for Wall Street’s AI-driven stock rally, which pushed the S&P 500 above the 5,000-point mark for the first time earlier this month. Some analysts had warned that disappointing results could cause tech stocks to plummet.
“Nvidia’s entire report gives other AI and technology companies a foundation of confidence because it’s clear that Nvidia and AI are here to stay,” said Andre Bakhos, president of Ingenium Analytics. states.
Nvidia increased its market capitalization by more than $250 billion, surpassing MetaPlatform’s $196 billion surge earlier this month and making it the largest single-day gain in Wall Street history.
The benchmark index will end this year above the 5,000 mark, according to strategists polled by Reuters.
Ten of the S&P 500’s 11 major sectors rose, with tech stocks leading the way with a 3.8% gain.
The S&P 500 Growth Index rose 2.8%, the biggest single-day gain since November 2022.
Stocks of other companies seen as beneficiaries of the AI push were also hurt. Nvidia’s rivals Advanced Micro Devices, server parts supplier Super Micro Computer and Arm Holdings jumped 4% to 33%.
The Philadelphia Semiconductor Stock Index rose 4.7%, hitting a record high.
Big Tech stocks and growth stocks like Alphabet, Microsoft and Metaplatform rose 1% to 4%.
Meanwhile, investors’ bets are leaning toward June as the starting point for the first interest rate cut by the Federal Reserve.
Fed Vice Chairman Philip Jefferson said Thursday that the central bank will take a comprehensive look at upcoming economic data when assessing when to start lowering its benchmark policy rate.
The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, data shows, suggesting a tight labor market.
Rivian and Lucid fell 26% and 17%, respectively, after the electric vehicle startups gave 2024 production forecasts that were significantly lower than analysts expected due to slowing demand.
