- The Nasdaq closed above 17,000 for the first time ever on Tuesday, driven by a surge in Nvidia stock amid ongoing AI optimism.
- Nvidia’s market value surpassed $2.5 trillion after its strong quarterly results and guidance, solidifying its position as the third most valuable company on Wall Street.
- While tech stocks like Nvidia rallied, the Dow Jones Industrial Average fell 216 points, or 0.6%, and the S&P 500 rose 0.1%.
The Nasdaq closed above 17,000 for the first time ever on Tuesday, lifted by a rally in Nvidia stock amid ongoing optimism about AI technology.
Nvidia Powers Nasdaq to Record High
Nvidia (NASDAQ:NVDA) stock jumped 7%, pushing the chipmaker’s market value above $2.5 trillion. The gains come on the heels of strong quarterly results last week that highlighted robust demand for AI-enabled chips.
“We think the AI investment cycle remains early with a new infrastructure buildout similar to the scale of all datacenters globally once uptake is ubiquitous,” Macquarie said in a note on Tuesday.
The promise of AI was further underscored over the weekend when Elon Musk‘s xAI said it raised $6 billion to fund development.
Meanwhile, Apple (NASDAQ:AAPL) stock gave up early gains to close flat despite data showing the iPhone maker’s April smartphone shipments in China jumped 52% year-over-year.
Other Stocks Making Moves
- United States Cellular (NYSE:USM) rose 12% after agreeing to sell its wireless operations and 30% of spectrum assets to T-Mobile for $4.4 billion.
- Sport-betting companies DraftKings (NASDAQ:DKNG) and Flutter Entertainment (NYSE:FLUT) plunged as an Illinois bill that hikes taxes on sports betting passed the state Senate.
- GameStop (NYSE:GME) jumped 25% after the video game retailer said it raised $933 million from a previously announced stock offering, shoring up its finances.
Economic Data, Fed Speakers Eyed
Treasury yields moved higher as data pointed to ongoing economic strength, reducing expectations for imminent Fed rate cuts.
Consumer confidence unexpectedly improved in May, signaling resilience among consumers who drive most U.S. growth. Traders now see just a 43.6% chance of a September rate cut, down from over 50% last week.
Key inflation data in the form of Friday’s PCE price index could shift expectations again. While a cool-down in inflation is anticipated, price growth is expected to remain well above the Fed’s 2% target.
Investors will also digest Q1 GDP revisions on Thursday along with Wednesday’s Fed Beige Book. Several Fed officials are slated to speak this week, including governors Michelle Bowman and Lisa Cook.
