Nvidia’s Rise Supports Wall Street Near Record Highs

Wall Street

Nvidia’s (NASDAQ: NVDA) recovery is a key factor in keeping U.S. indexes near record highs. The S&P 500 rose slightly by 0.1% in early Tuesday trading, while the Nasdaq composite gained 0.5%. However, the Dow Jones Industrial Average, which does not include Nvidia, fell by 0.2% or 82 points. Nvidia’s stock climbed 2.6%, rebounding from a three-day decline that saw it lose nearly 13%. The strong demand for has been a major force behind the recent record highs in the U.S. stock market, even as the broader economy slows down due to high interest rates.

Wall Street markets saw mixed performance early Tuesday after Nvidia’s third consecutive day of decline on Monday. Dow Jones Industrial Average futures slipped by 0.1%, while S&P 500 futures rose less than 0.2%.

Nvidia managed to gain 2.2% before the market opened, recovering some of its recent losses amid a cooling enthusiasm for AI technology. The stock had been on a decline after briefly overtaking Microsoft as the most valuable company on Wall Street last week, dropping by nearly 13% in just three days.

In contrast, Microsoft shares remained relatively flat after facing accusations of antitrust violations from the European Union related to the bundling of its Teams app with other business software.

Before the opening bell, SolarEdge experienced a significant decline of over 17% after news that its customer, PM&M Electric, is filing for bankruptcy. SolarEdge also announced plans to raise $300 million through convertible senior notes.

Toolmaker Epac slid by over 9% after missing its third-quarter sales targets and issuing lower-than-expected revenue guidance for the fourth quarter.

Later on Tuesday, the Conference Board was set to release its latest consumer confidence report. In May, U.S. consumer confidence rose after three consecutive months of decline, despite concerns over high inflation and interest rates.

In Europe, major indexes showed mixed results at midday, with France’s CAC 40 losing 0.8%, Germany’s DAX falling by 1%, and Britain’s FTSE 100 down by 0.2%.

Meanwhile, in Asia, Japan’s Nikkei 225 jumped by 1% to reach 39,173.15, although the yen remained weak against the dollar. Hong Kong’s Hang Seng closed 0.3% higher, while China’s Shanghai Composite index dipped by 0.4%.

Other Asian markets showed gains, with Australia’s S&P/ASX 200 climbing by 1.4%, South Korea’s Kospi rising by 0.4%, Taiwan’s Taiex increasing by 0.3%, and Thailand’s SET advancing by 0.1%.

In the bond market, Treasury yields remained steady, with the 10-year Treasury yield holding at 4.23% and the 2-year note yield at 4.73%.

Benchmark crude oil prices fell, with U.S. crude dropping by 55 cents to $81.08 per barrel, and Brent crude losing 52 cents to $84.63 per barrel. The euro also slipped to $1.0712.

On the previous trading day, the S&P 500 slipped by 0.3% to close at 5,447.87, while the Nasdaq composite dropped by 1.1% to 17,496.82. In contrast, the Dow Jones Industrial Average rose by 0.7% to reach 39,411.21.

The markets are closely watching these developments to gauge the ongoing impacts of Nvidia’s performance and the broader economic conditions on the U.S. and global markets.

Investors are also closely monitoring geopolitical developments, particularly in Ukraine, where tensions remain high between Russia and NATO. Any escalation in the conflict could have significant repercussions on global markets, particularly on energy prices. Additionally, the ongoing COVID-19 pandemic continues to pose challenges, with new variants emerging and impacting economic activity in various regions. Supply chain disruptions and inflationary pressures remain key concerns for policymakers and investors alike, shaping market sentiment and influencing investment decisions. As the markets navigate these uncertainties, investors are advised to maintain a diversified portfolio and stay informed about the latest developments to make informed investment decisions.