On Wednesday, Wall Street posted fresh record highs as traders fuelled enthusiasm over Artificial Intelligence (AI) technology. Market capitalisation of Nvidia, one of the leaders in the AI revolution, reached $3 trillion for the first time.
The S&P 500 increased a 1. 2 percent, higher than its previous high attained only a fortnight ago. Nasdaq composite also ended 2% higher and reached historic high. The Dow Jones Industrial Average that pays less attention to technology shares increased 96 points or 0. 2%.
Market gains were bolstered by well-performing profit reports from tech companies. Hewlett Packard Enterprise had an increased of 10 per cent of its software sales. up by 7% after announcing increased sales of AI systems that have helped deliver improved performance. The company also brought up its financial expectations for the year.
Tech companies are delivering on Wall Street’s expectations for generating AI-related revenue, making stocks go up irrespective of the overall economy and rising interest rates. Nvidia is the leading company in this case since most of its chips are used in AI growth. The company’s stock increased by 5 percent. 2% and thus year to date was over 147%. Nvidia once more led the S&P 500 gainers pack.
Nvidia became the fourth US stock to reach $3tn market value along with Microsoft and Apple. Apple regained this achievement after its share increased by 0. 8% on Wednesday.
Other leading technology shares also appreciated; Microsoft rose by 1%. 9%, Meta Platforms rising by 3. 8%, and Broadcom being up by 6. 2%. cybersecurity firm CrowdStrike rose 12% as key financial metrics of the company’s latest quarter exceeded market expectations.
In summary, the S&P 500 was up by 62. 69: 5,354. 03. The Nasdaq rose 330. 86 points to 17,187. 90 and the increase in Dow was 96. 04 points to 38,807. 33.
Tech stock gains also pale a 4. Dollar Tree’s shares have fallen by 9%. The retailer did deliver on the profit, but fell short on the revenue, by a small margin though. Dollar Tree also revealed its plan to explore the sale of or spin-off of the Family Dollar chain. Retail has been raising concerns over the impact of high inflation to the purchasing capabilities of the poor or lower income earners.
Treasury yields decreased in the bond market due to a mixed bag of economic reports. In the U. S, one report revealed that the services sector expanded, this was better than analyst expectations as the prices increased at a slower rate in May than in April. Another report suggested that hiring, outside the government labor market, was relatively stagnant.
Previous news indicated that the growth of U.S economy was being threatened by high interest rates. On Wall Street the idea of inflation decreasing and thus forcing the Federal Reserve to lower the interest rates has been anticipated. As for the risks, the stock market is vulnerable to the possibility of the economy sliding into a recession.
Yields on the benchmark U.S. government debt dropped further on Wednesday. The yield on the 10-year Treasury fell to 4. 28% from 4. 33% on Tuesday and 4 percent on Wednesday for the planned increase in the minimum monthly wage. 60% a week ago. The next big move in Treasury yields and Wall Street could be on Friday when US’s monthly jobs data is out. It is presumed that this all-inclusive report will depict a marginal rise in the employment tendencies. The idea is to bring a halt to its growth without leading to high unemployment rates.
The least favorable situation for markets is if economy reports come in better-than-expected, prompting the Federal Reserve to make a deeper hike in interest rates, which in turn puts pressure on the economy and assets. JJ Kinahan, the CEO of IG North America, agrees with this and states that this is less probable than other outcomes.
Main European indexes advanced prior to the ECB’s interest rate announcement on Thursday. Some reasons include the belief by investors that a cut is likely to be made due to economic issues. On the other hand Asian stocks declined in value as measured by declines in their indexes of -0. 96%, in Tokyo and 0.0% in Kyoto respectively, thus illustrating the increased utilization of green technologies in these cities. In Shanghai this stood at 8% and in Seoul there was a 1% increase in this regard.
