Nvidia Propels Nasdaq and S&P 500 to Record Highs Amid Inflation Data and Fed Interest Rate Speculation

The Nasdaq and S&P 500 reached record highs on Wednesday, boosted by gains in Nvidia and other big companies ahead of upcoming inflation data and quarterly earnings reports.

High Record

This marked the Nasdaq’s seventh consecutive record high and the S&P 500’s sixth. The S&P 500 crossed 5,600 points for the first time after Federal Reserve Chair Jerome Powell hinted at a possible interest rate cut in September.

Powell, in his Congressional testimony, expressed cautious optimism about inflation moving towards 2%, but was not fully convinced.

Taiwan Semiconductor Manufacturing Co

The Philadelphia semiconductor index rose 2.4% to a record high after Taiwan Semiconductor Manufacturing Co reported strong quarterly revenue.

“TSMC’s report supported the AI narrative, making it a significant data point,” said Thomas Martin, senior portfolio manager at Globalt Investments in Atlanta. Micron Technology jumped 4%, Nvidia climbed 2.7%, and Advanced Micro Devices added 3.9%. Apple increased 1.9% to a record high, raising its market value to $3.6 trillion. Some investors are concerned about a potential selloff if these companies’ earnings do not meet high expectations.

Nasdaq Gains

The S&P 500 rose 1.02% to 5,633.91 points, the Nasdaq gained 1.18% to 18,647.45 points, and the Dow Jones Industrial Average increased 1.09% to 39,721.36 points.

The S&P 500 is up 18% in 2024, and the Nasdaq has gained 24%.

All 11 S&P 500 sector indexes rose on Wednesday, led by information technology with a 1.63% increase, followed by a 1.34% gain in materials.

Trading Volume

Trading volume on U.S. exchanges was light, with 10 billion shares traded compared to an average of 11.5 billion shares over the previous 20 sessions.

Upcoming U.S. inflation data includes the Consumer Price Index on Thursday and the Producer Price Index report on Friday.

Basis Point

Expectations for a 25-basis-point rate cut by September increased to 74%, up from around 70% on Tuesday and 45% a month ago, according to CME’s FedWatch.

The second-quarter earnings season, starting this week with major banks reporting on Friday, will test whether the strong performance of large-cap stocks can continue.

Drop in the Intuit

Intuit dropped 2.6% after announcing plans to lay off about 10% of its workforce.

Gene-sequencing equipment maker Illumina jumped over 6% after announcing it was acquiring privately held Fluent BioSciences.

Advancing issues outnumbered falling ones within the S&P 500 by a 4.3-to-one ratio.

The S&P 500 posted 33 new highs and 11 new lows; the Nasdaq recorded 65 new highs and 117 new lows.