Apple And Nvidia Rally To $3 Trillion Club—Boosts S&P 500 To Record – Forbes
Two of the three major stock indexes notched all-time highs Wednesday on the back of yet another surge from companies tightly linked to artificial intelligence ecstasy.
The S&P 500 soared to a record high Wednesday.
The S&P 500 rose 1.2% to 5,353, breaking its prior all-time closing high set May 23, and the tech-heavy Nasdaq Composite jumped almost 2% to 17,186, shattering its previous record set May 28.
The indexes’ apexes came as two of its three most valuable stocks surpassed $3 trillion market capitalizations, with Nvidia topping the milestone for the first time ever and Apple passing the mark for the first time since January.
Captaining the broader rally were stocks tied to companies that make and design semiconductor chips, especially those linked to AI, with the Philadelphia Stock Exchange’s Semiconductor index (SOX), which measures 30 of the biggest chip stocks, rocketing almost 5%.
Shares of AI chip market dominator Nvidia surged 5% to an all-time high, while shares of peers Taiwan Semiconductor (up 6% Wednesday), Broadcom (5%) and ASML (9%) also outperformed the market.
Also rising Wednesday were other massive tech stocks, including Microsoft (up more than 1%) and Facebook parent Meta (up 3%), with the tech-heavy rally coming as the sector that’s typically heavily impacted by interest rate movements enjoyed increased bets on rate cuts later this year.
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Nvidia surpassed Apple as the world’s second-largest company by market cap in afternoon trading closing the day at $3.01 trillion, just above the iPhone maker’s $3 trillion flat valuation. It’s a remarkable feat for the AI chip designer Nvidia, whose market value of $1.2 trillion at the beginning of the year was a fraction of Apple’s $3 trillion. Microsoft remains the largest company in the world, valued at about $140 billion more than Apple and Nvidia.
Broadly boosting sentiment across the market were lower bond yields, as 2-year and 10-year U.S. Treasury yields slipped to two-month lows. The lower yields, which indirectly make borrowing costs cheaper, signal investor confidence in a downward move for rates. Notably, Canada became the first Western country to lower its lending rate Wednesday, while a weak U.S. labor market report from private payroll processor ADP signaled a growth-friendly rate cut from the Federal Reserve would not overheat the labor market and undue the progress on rightsizing the economy. Investors expect the Fed to first cut rates in September, according to futures contract trading tracked by CME FedWatch Tool.
The Dow Jones Industrial Average, which is among the three major stock indexes in addition to the S&P and Nasdaq, ended Wednesday about 5% short of its all-time high set last month. The lagging Dow, which has also underperformed the S&P and Nasdaq on a year-to-date basis, can largely be attributed to its exclusion of Nvidia in its 30-stock constituency, considering Nvidia has accounted for about a fifth of the 500-stock S&P’s year-to-date gains.
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