April 24th, 2024

Stock market today: Nvidia shares surge and set off a rally on Wall Street

By Damian J. Troise, The Associated Press on February 22, 2024.

NEW YORK (AP) – Nvidia’s stock price surged after delivering another blowout quarter, setting off a rally in other technology companies that carried Wall Street to another record high. The chipmaker, a central player in the boom surrounding artificial intelligence technology, reported scorching demand for its semiconductors. The S&P 500 rose 2.1% Thursday to another all-time high. The Nasdaq added 3%. The Dow, which has a smaller weighting in tech stocks, rose 1.1%, marking its first close above 39,000. Nvidia’s stock price rose more than 16%, leading gains among tech companies. Treasury yields held relatively steady. Japan’s Nikkei 225 surged to an all-time high.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

NEW YORK (AP) – Nvidia sparked a rally on Wall Street Thursday after the AI chipmaker reported another blowout quarter.

The S&P 500 rose 2% in afternoon trading. The big gain puts the benchmark index on track for another record high while pushing it higher for the week after two lackluster days.

The Dow Jones Industrial Average rose 398 points, or 1%, to 39,011 as of 1:54 p.m. Eastern. The tech-heavy Nasdaq jumped 2.9%.

Nividia surged 15.2% after reporting that its revenue and profit soared in the latest quarter thanks to booming demand for its chips used for artificial intelligence. The stock has tripled over the past year thanks to a surge in investor enthusiasm over artificial intelligence.

Synopsis, which makes software used to test and develop chips, rose 7.1% after raising its profit forecast.

Other chipmakers and companies involved in the chipmaking industry gained ground. Advanced Micro Devices rose 11.4% and Lam Research rose 4.8%.

Overnight, Japan’s Nikkei 225 surged to an all-time high. Record gains in corporate earnings have enhanced the appeal of shares in Japanese companies, along with the weakness of the Japanese yen against the U.S. dollar.

Markets in Asia and Europe gained ground.

Bond yields were relatively steady. The yield on the 10-year Treasury rose to 4.34% from 4.32% late Wednesday.

On the losing end, electric truck and SUV maker Rivian tumbled 26.1% after it reported another loss and issued a weaker-than-expected production outlook. Lucid, another electric vehicle manufacturer, slid 16.1% after it missed Wall Street sales forecast and also gave a weaker production estimate than analysts had called for.

Online craft marketplace Etsy fell 8.5% after it missed Wall Street’s profit forecast by a wide margin.

Technology stocks have been the driving force behind the market’s rally that started in October. Solid earnings from some of the biggest names in the sector are helping justify and reinforce those big gains.

“Investors are still wondering, will the market top out or broaden out,” said Sam Stovall, chief investment strategist at CFRA. “As of now, investors are basically saying I’m going to let this market take me where it wants to go, and right now that’s higher.”

Wall Street expects just under 4% growth for earnings in the overall S&P 500 during the fourth quarter. The communication services sector, which includes Google’s parent Alphabet, is expected to report 45% growth. Information technology companies, which include Nvidia, are expected to notch 22% growth.

“The near-term momentum in AI-related stocks is likely to continue,” said Solita Marcelli, chief investment officer for the Americas at UBS Global Wealth Management.

Nearly 90% of companies in the S&P 500 have reported earnings. There are still a few big names on deck this week. Online travel giant Booking Holdings and TurboTax maker Intuit will report later Thursday.

Wall Street’s focus on earnings this week follows economic data from the previous week that prompted a stumble in the market. Inflation data came in hotter than Wall Street expected, while retail sales fell more than anticipated. That raised concerns about the timing of hoped-for interest rate cuts from the Federal Reserve.

Wall Street is now betting that the central bank will start trimming its benchmark rate in June, rather than March.

Investors could get more clarity on inflation next week when the government releases its monthly report on personal consumption and expenditures. It’s the Fed’s preferred measure of inflation as it tries to tame inflation back to 2%. Analysts expect that report to show inflation cooled to 2.3% in January. It peaked at 7.1% in June of 2022.

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Business writers Elaine Kurtenbach and Matt Ott contributed.

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