A rally in chip stocks recently lifted the Nasdaq and S&P 500 to record highs. Companies like Nvidia, Super Micro Computer, and Intel saw significant gains in their stock prices. Nvidia jumped 2.5%, while Super Micro Computer, a company that makes AI-optimized servers using Nvidia’s chips, rallied almost 9%. Intel also rallied almost 6%. This surge in chip stocks played a crucial role in propelling the overall market to new record levels.
Market Expectations
Investors are eagerly awaiting fresh inflation data, commentary from Federal Reserve Chair Jerome Powell, and the start of quarterly earnings season. Traders are particularly focused on consumer price data expected on Thursday and producer price data on Friday to assess the Fed’s approach to fighting inflation. There are growing concerns that delaying interest rate cuts could have a negative impact on the labor market and potentially lead to an economic downturn. Investors will closely monitor Powell’s testimony before U.S. Senate and House committees, hoping for a dovish tone and an acknowledgment of balanced risks.
Impact of Economic Data
Expectations for interest-rate cuts in September have increased following a slowdown in U.S. job growth in June. Traders now see a higher probability of a rate cut by at least 25 basis points in September, up from the previous week. The upcoming earnings season, starting with companies like Citigroup, JPMorgan Chase, and Wells Fargo, will provide further insights into the health of the economy. Analysts anticipate S&P 500 companies to increase their aggregate earnings per share in the second quarter, indicating overall growth in the market.
The S&P 500 was last up slightly at 5,570.68 points, while the Nasdaq gained to 18,389.54 points. The Dow Jones Industrial Average saw a small decline. Information technology and materials sectors experienced gains, while consumer services suffered a decline. Individual companies like Meta Platforms and Paramount Global experienced significant changes in their stock prices due to various factors. Planemaker Boeing also saw a slight increase after agreeing to plead guilty to criminal charges and pay a fine to resolve legal issues.
Overall, the performance of chip stocks has had a significant impact on the broader market. Companies like Nvidia, Super Micro Computer, and Intel have contributed to the record-high levels seen in the Nasdaq and S&P 500. Investors are closely monitoring economic data, Fed commentary, and earnings reports to gauge the future direction of the market. The upcoming quarters will provide further clarity on how the market is responding to various challenges and opportunities.