NEW YORK (AP) — NVIDIA That’s helping U.S. stock indexes approach all-time highs on Tuesday.
The S&P 500 rose 0.2% in morning trading, nearing the all-time high it reached a week ago. Nvidia’s rebound helped push the Nasdaq Composite up 0.7%, heading for its first gain in four days. The Dow Jones Industrial Average, which does not include Nvidia, lagged behind, down 140 points, or 0.4%, as of 10:05 a.m. Eastern time.
Nvidia rose 3.4%, pulling away from a three-day selloff that saw it fall nearly 13%, its worst since 2022. While it’s just one stock, Nvidia has the power to move the S&P 500. The biggest and most influential stocks on Wall Street.
Voracious Demand Nvidia’s chips Powering artificial intelligence applications It has become The big reason Despite slowing economic growth, the U.S. stock market has recently been breaking records. Weight slows it down High interest rates are to blame. But the AI boom has been so feverish that it’s raising concerns about a stock market bubble and investors’ expectations being too high.
Nvidia’s recent struggles aren’t causing too much concern, at least for now, as market participants are hoping to see more stocks join the rising stock market, rather than a few AI stocks winning.
That’s exactly what happened on Monday, as banks, oil companies and other stocks unrelated to the AI boom soared while Nvidia’s shares fell again. But they may have a hard time staying afloat given slowing U.S. economic growth.
In financial markets, investor focus is beginning to shift from inflation and interest rates to growth, according to Morgan Stanley’s Michael Wilson and other strategists.
Pool Corp.’s shares fell 8 percent after the company cut its earnings forecast for this year, saying new pool construction was declining as consumers were being cautious about spending on big-ticket items.
Though it was the worst-performing stock in the S&P 500, Poole wasn’t alone: Three-quarters of the stocks in the index fell.
SolarEdge Technologies shares fell 16.4% after the company said a customer owed the company $11.4 million had filed for Chapter 7 bankruptcy protection, raising questions about when and how much the solar power company will get to recoup.
Roughly speaking: Retailers nationwide Recently, the market has been fluctuating, and companies Low-income customers often struggle To keep up with still rising prices. Job marketBut overall they appear to be holding steady.Tuesday’s report also showed that U.S. consumer confidence fell this month, but not by as much as economists had expected.
High-income families seem to be on the mend as the economy improves and they’re booking trips on cruise ships. Carnival shares rose 3.7% after it raised its 2024 profit forecast and said bookings for the rest of the year were at all-time highs, both in terms of prices and occupancy. And while it’s still early, booking trends for next year look even better.
In the bond market, Treasury yields remained relatively stable. The 10-year Treasury yield rose to 4.25% from Monday’s close of 4.23%.
It has mostly fallen since hitting above 4.70% in late April, easing pressure on the stock market. Yields have been falling on hopes that inflation is slowing enough to convince the Federal Reserve to raise rates. lower key interest rates It’s scheduled for later this year.
The Federal Reserve has kept the federal funds rate at its highest level in more than 20 years, weighing on the economy. inflation It’s under control. Wall Street is hoping the Fed will cut interest rates at the right time. Wait too long and the economic slowdown could turn into a recession. Wait too soon and inflation could accelerate again.
Investors are eagerly awaiting the first rate cut, which many traders expect to come in September, but stocks don’t necessarily rally afterward: Historically, the S&P 500 has fallen an average of 20% in the 250 days following the first rate cut, according to Wells Fargo Investment Institute.
That’s because why the Fed cuts rates matters. If they’re easing conditions in the economy simply because inflation is finally low enough to cut rates, that might be good for stocks. But if they’re cutting rates because the economy is suddenly heading for a recession, that’s a different story.
In overseas stock markets, stock price indexes fell in many European countries, while stock price indexes rose in many Asian countries.
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AP writers Matt Ott and Jimmo Zhong contributed.
