Nvidia Tops Microsoft as S&P 500 Reaches New Record Close, Fuelling Market Optimism

Vida Markets

Wednesday 19th June 2024, 9:55 am Time to read: 6 mins.

Despite ongoing economic uncertainties, the S&P 500 surged to a new record close on Tuesday, driven by the remarkable performance of Nvidia, which has now surpassed Microsoft as the most valuable public company. This rise underscores the enduring investor enthusiasm for artificial intelligence and semiconductor stocks, despite mixed signals from the retail sector and fluctuating

Despite ongoing economic uncertainties, the S&P 500 surged to a new record close on Tuesday, driven by the remarkable performance of Nvidia, which has now surpassed Microsoft as the most valuable public company. This rise underscores the enduring investor enthusiasm for artificial intelligence and semiconductor stocks, despite mixed signals from the retail sector and fluctuating Treasury yields. As Nvidia continues its extraordinary run, the broader market is encouraged by gains in tech stocks and a renewed interest in equities across Europe and the Asia-Pacific region.

Key Takeaways:

S&P 500 Hits New Record Close: The S&P 500 added 0.25% to close at 5,487.03, marking a fresh record as Nvidia's rise drove the index higher. This continued growth highlights strong market sentiment despite mixed economic indicators.
Nasdaq Composite Edges Up While Dow Jones Gains Slightly: The Nasdaq Composite inched up 0.03% to end at 17,862.23, also achieving a record close. The Dow Jones Industrial Average rose 56.76 points, or 0.15%, to settle at 38,834.86. The index showed resilience with modest gains, reflecting investor confidence. The tech-heavy index's performance was lifted by gains in semiconductor stocks and AI-related enthusiasm.
Nvidia Becomes Most Valuable Public Company: Nvidia's stock jumped 3.5% to $135.60, surpassing Microsoft's market cap and reaching $3.336 trillion. This milestone comes as Nvidia continues to dominate the AI sector, having surged 174% since the start of the year.
Semiconductor Stocks Rally: Semiconductor stocks saw significant gains, with Qualcomm up 2.2%, Taiwan Semiconductor rising 1.4%, and Micron Technology climbing 3.8%. The sector benefited from declining Treasury yields and ongoing AI demand.
European Markets Close Higher: The Stoxx 600 index rose 0.66%, led by a 1.3% increase in construction stocks. The FTSE 100 gained 0.6% to 8,191.29, and the CAC 40 climbed 0.8% to 7,628, driven by improved investor sentiment following recent political turmoil.
Asia-Pacific Markets Rebound: Japan's Nikkei 225 rose 1% to 38,482.11, while Australia's S&P/ASX 200 gained 1.01% to 7,778.1. South Korea's Kospi increased by 0.72% to 2,763.92, led by gains in chipmakers.
US Retail Sales Disappoint: May retail sales rose just 0.1%, below expectations, signalling potential consumer spending slowdowns. Excluding autos, sales declined 0.1%, with gas station receipts dropping 2% and online sales increasing by 0.8%.
Treasury Yields Retreat: US Treasury yields fell as concerns about the strength of the consumer emerged following weak retail sales data. The 10-year Treasury yield dropped by more than 6 basis points to 4.215%, and the 2-year Treasury note yield decreased by over 5 basis points to 4.708%.


FX Today:

Gold Prices Rise Amid Soft Retail Sales, Boosting Rate Cut Hopes: Gold (XAU/USD) increased by 0.6% to trade at $2,330, following weaker-than-expected retail sales data, which heightened expectations of a Federal Reserve rate cut. If the price falls below $2,300, it could find support at $2,277. On the other hand, breaking through $2,350 might see the metal test resistance at $2,387 and potentially reach $2,400.
GBP/USD Holds Steady Around 1.2700 Amid Mixed Sentiment: GBP/USD remained relatively unchanged, hovering just above the 1.2700 level. A decline below 1.2680 could push the pair towards support at 1.2656, the low from June 14, and further down to the 100-day moving average around 1.2640. Conversely, surpassing 1.2730 could spark a rally towards the 1.2800 mark.
EUR/USD Recovers as Weak US Retail Sales Boost Rate-Cut Expectations: EUR/USD bounced back to 1.0740 following disappointing US retail sales figures that pressured the Dollar. The pair is likely to find support at 1.0636, near the trendline from the low of 1.0448. However, the long-term outlook remains bearish as it trades below the 200-day Exponential Moving Average (EMA), currently at 1.0800.
USD/JPY Continues Upward Trend but Struggles Below 158.00: USD/JPY advanced for the fourth consecutive day, posting modest gains of 0.08%, yet consolidating below the 158.00 level. If USD/JPY breaks above 158.00, it could encounter resistance at 158.25. Clearing these levels might lead to testing the year-to-date high of 160.32. Should the pair fall below 157.00, key support levels would be 156.16, 155.93, and 155.52.
USD/CAD Remains Range-Bound as Market Focus Shifts: USD/CAD traded within a familiar consolidation range of 1.3760 to 1.3720. Near-term momentum is centred around the 200-hour Exponential Moving Average (EMA) at 1.3730. Despite holding above the 50-day EMA at 1.3674, the pair remained sluggish, trading below last week’s peak near 1.3790. A drop below 1.3700 could lead to testing lower technical supports.
AUD/JPY Rises Towards 105.00 Amid Strong Bullish Momentum: The AUD/JPY pair showed strong performance, advancing towards the 105.00 level, supported by its position above the 20-day (104.00), 100-day (100.28), and 200-day (98.28) SMAs. The pair is expected to continue its uptrend within the 105.00-106.00 range. If the 104.00 support level (20-day SMA) is breached, new support levels at 102.50 and 100.35 could be targeted.
Market Movers:

Occidental Petroleum Climbs on Berkshire Hathaway Purchase: Shares of Occidental Petroleum increased by approximately 1.8% following filings that revealed Warren Buffett’s Berkshire Hathaway had acquired more shares over the past nine trading sessions, bringing its holding to over 255 million shares, representing a 28.8% stake.
La-Z-Boy Soars on Strong Earnings: La-Z-Boy's stock surged over 19% after the furniture company exceeded Wall Street expectations for the fiscal fourth quarter. The company reported adjusted earnings of 95 cents per share on revenue of $554 million, significantly higher than the anticipated earnings of 70 cents per share on revenue of $516 million.
Rocket Lab USA Jumps on Launch Deal: Shares of Rocket Lab USA climbed approximately 13% after announcing a 10-launch deal with Japanese Earth observation company Synspective. The new launches are scheduled to take place between 2025 and 2027, boosting investor confidence in the company's future growth prospects.
e.l.f. Beauty Gains on Positive Outlook: e.l.f. Beauty saw its shares rise more than 9% following a recent upgrade. The firm increased its price target for the stock to $250 from $214, implying nearly 30% upside from Monday’s close, citing strong growth potential.
Six Flags and Cedar Fair Rise on Merger News: Six Flags' shares rose around 5.8% and Cedar Fair’s shares increased by 7.5% following the announcement that their merger is expected to be completed on July 1. Six Flags also announced a special dividend of $1.53 per share post-merger.
Celsius Holdings Pops on Analyst Endorsement: The energy drink maker’s stock jumped more than 8% after Piper Sandler reiterated its overweight rating, describing the recent sell-off as “overdone.” The firm’s new price target suggests the shares could rise over 50% from Monday’s close.
NextEra Energy Declines on Equity Sale Announcement: NextEra Energy's shares fell more than 2.5% after the company announced plans to sell $2 billion in equity units to fund power and energy projects and to repay debt, causing investor concern over potential dilution.
Lennar Drops on Guidance Despite Strong Results: The homebuilder’s stock fell nearly 5% after issuing fiscal third-quarter guidance that new orders would decrease quarter-over-quarter. However, Lennar reported better-than-expected second-quarter results with earnings of $3.45 per share on $8.77 billion in revenue, compared to the expected $3.24 per share on $8.52 billion in revenue.
Patterson Companies Surges on Revenue Beat: Patterson Companies' stock rose around 11% after beating Wall Street's expectations for the fiscal fourth quarter. The company reported adjusted earnings of 82 cents per share on $1.72 billion in revenue, surpassing the anticipated earnings of 82 cents per share on $1.7 billion in revenue.
As Tuesday's trading session came to a close, the market demonstrated strong resilience and investor enthusiasm, particularly in the tech and AI sectors. The record-setting highs of the S&P 500 and Nasdaq Composite, driven by Nvidia's milestone achievements, underscore a robust market sentiment despite economic uncertainties highlighted by weaker retail sales and fluctuating Treasury yields. The notable performances in semiconductor stocks and significant movements in major indices across the globe, from Europe’s steady gains to Asia-Pacific’s rebound, reflect a cautious yet hopeful outlook. Investors remain optimistic about the potential of technological advancements while navigating the complexities of economic indicators and policy decisions.

 

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