Wall Street Closes Higher as Nvidia Shares Rebound and Investors Look to Fed Meeting
Wall Street’s three major indexes closed higher on Tuesday, with shares in chipmaker Nvidia bouncing back from early losses. Investors are also eagerly anticipating the conclusion of the Federal Reserve’s policy meeting on Wednesday for insights into interest rate policy. Here are the key points:
Nvidia’s Recovery Boosts Sentiment
Shares in Nvidia pulled out of the red to close up 1% after announcing pricing and shipment plans for its highly anticipated Blackwell B200 artificial intelligence chip. The company claims that this chip could be 30 times faster than current chips. The recovery of Nvidia’s shares contributed to improving sentiment among investors.
Improving Bullishness about the Economy
Michael James, managing director of equity trading at Wedbush Securities, believes that the overall gains on Tuesday were driven by improving sentiment and ongoing bullishness about the direction of the economy. He highlighted that money is flowing into the market beyond just technology stocks.
Stock Market Performance
The stock market performance on Tuesday was as follows:
- The Dow Jones Industrial Average rose 320.33 points, or 0.83%, to 39,110.76
- The S&P 500 gained 29.09 points, or 0.56%, to 5,178.51
- The Nasdaq Composite gained 63.34 points, or 0.39%, to 16,166.79
The Dow Jones Industrial Average outperformed its peers on Wall Street, with support from gains in Home Depot (2%), McDonald’s (over 1%), and Apple Inc. (over 1%). In the S&P 500, only the communications services sector experienced a slight decline of 0.2% after a significant rally on Monday. The energy sector led gains, rising 1.1% due to an increase in oil prices.
Investors Prepare for Fed Meeting
Investors are preparing for the Federal Reserve’s policy update and Chair Jerome Powell’s press conference. Robust inflation data has reduced expectations for an interest rate cut in June. However, there is optimism that the Fed will not surprise the market significantly during its meeting. Some analysts still believe that three rate cuts are possible, depending on economic data.
Other Market Movers
In addition to Nvidia, several other companies experienced notable movements:
- Crypto-exchange operator Coinbase Global fell almost 4%
- Miner Riot Platforms fell almost 3%, accompanied by a 5% slide in bitcoin
- MicroStrategy shares dropped 5.7% after completing a $603.75 million convertible debt offering to fund bitcoin purchases
- AI server maker Super Micro Computer saw its shares tumble just under 9% after announcing plans to sell 2 million shares worth approximately $2 billion
- Spire Global shares soared 30.4% following the announcement of a collaboration with Nvidia for AI-driven weather prediction
Market Statistics
Here are some key market statistics:
- Advancing issues outnumbered decliners by a ratio of 2.25-to-1 on the NYSE, with 286 new highs and 53 new lows
- On the Nasdaq, advancing issues outnumbered decliners by a ratio of about 1.42-to-1, with 98 new highs and 126 new lows
- The S&P 500 recorded 49 new 52-week highs and one new low
On U.S. exchanges, approximately 10.74 billion shares were traded, slightly lower than the average for the past 20 sessions.
Hot Take: What to Expect from the Fed Meeting
As investors eagerly await the Federal Reserve’s policy meeting conclusion, there is optimism that the central bank will not surprise the market. However, caution remains regarding inflation and its impact on future policy decisions. Here’s what to keep in mind:
- The Fed’s policy will depend on economic data
- Expect updated inflation and economic growth projections
- Robust inflation data has reduced expectations for an interest rate cut in June
- Three rate cuts are still seen as possible by some analysts
Overall, the market remains optimistic about the direction of the economy and continues to see money flowing into various sectors beyond just technology stocks.
Sources:
The Economic Times
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