S&P 500 Reaches 5,100 Milestone Amid AI Optimism and Economic Strength, Nvidia Leads Charge with Historic Valuation Surge
The S&P 500 reached a significant milestone, hitting the 5,100 mark, as the stock market’s winning streak continued. This achievement was fueled by optimism around artificial intelligence and positive economic indicators, pushing stocks towards another record high. Nvidia Corp (NVDA), played a pivotal role in this rally, poised to be the first chipmaker to achieve a $2 trillion valuation after a notable rise in its stock price, which has soared by more than 60% in 2024, marking the highest increase in the American stock market. However, not all major tech companies experienced gains; Apple Inc. and Tesla Inc. lagged behind the broader market. Meanwhile, 10-year Treasury yields dropped slightly.
Nvidia’s surge resulted in significant losses for short sellers, estimated at around $3 billion by S3 Partners LLC, highlighting the challenges bearish traders face amidst the AI-driven stock market enthusiasm. Despite concerns of a tech bubble, market analysts from Barclays Plc suggest that the current price movements are in line with fundamental earnings.
The broader market’s rally, especially after Nvidia’s impressive earnings report, showed limited participation from S&P 500 companies, indicating a mixed response from investors. Corporate news varied, with Warner Bros. Discovery Inc. (WBD), and Booking Holdings Inc. (BKNG), facing challenges, while Block Inc. (SQ) and Carvana Co. (CVNA), reported strong results. Additionally, Viking Holdings Ltd. is moving forward with an IPO, Intuitive Machines Inc. (LUNR), achieved a lunar landing milestone, and Standard Chartered Plc (STAN.L), announced plans to enhance shareholder returns. PIMCO (PDI), also reported significant capital inflow, indicating continued investor interest in the financial markets.
