US STOCKS - S&P 500, Dow Jump to Record Closes as Nvidia Sparks AI Frenzy

February 23, 2024, 04.43 AM | Source: Reuters
US STOCKS - S&P 500, Dow Jump to Record Closes as Nvidia Sparks AI Frenzy

ILUSTRASI. US STOCKS - S&P 500, Dow Jump to Record Closes as Nvidia Sparks AI Frenzy. REUTERS/Brendan McDermid

WALL STREET - Feb 22 (Reuters) - The S&P 500 and Dow Jones Industrial Average both surged to close at record highs on Thursday, powered by investors piling into growth and technology stocks the day after artificial intelligence poster child Nvidia's bumper earnings and outlook.

Nvidia'sNVDA.O shares leaped after the chip designer forecast a roughly three-fold surge in first-quarter revenue on strong demand for its AI chips and beat expectations for fourth-quarter revenue.

The company's earnings were a major test for the AI-fueled rally on Wall Street that first pushed the S&P 500 .SPX above the 5,000 point mark earlier this month. Some analysts had cautioned that disappointing results could spark a steep selloff among technology stocks.

Instead, the S&P 500 .SPX ended at a record high, as did the Dow Jones Industrials .DJI, which closed above 39,000 for the first time.

Read Also: Sri Mulyani Warns of Ongoing Commodity Price Contraction Trend in 2024

Unofficial closing data showed the Dow Jones Industrial Average .DJI rose 456.54 points, or 1.18%, to 39,068.78, the S&P 500 .SPX gained 105.14 points, or 2.11%, to 5,086.94 and the Nasdaq Composite .IXIC added 460.75 points, or 2.96%, to 16,041.62.

"As Nvidia goes, so goes the world," joked Jack Janasiewicz, lead portfolio strategist at Natixis Investment Managers Solutions.

He noted how Nvidia's earnings performance trounced high market expectations, showing doubters that plenty of juice was left in the AI trade after the recent rally.

"When do you sell - maybe you don't. Maybe there's still room, and I'm happy to sit and ride it out," Janasiewicz added.

Nvidia additions to its market capitalization on Thursday beat Meta Platform's $196 billion surge earlier this month as the biggest one-day gain by any company in Wall Street history.

The benchmark index will finish this year above the 5,000 mark, according to strategists in a Reuters poll.

Most of the 11 major S&P 500 sectors rose, with technology stocks .SPLRCT leading gains.

Read Also: Smartfren Telecom's ROSA Program: Disrupting the Home Internet Market Landscape

The S&P 500 growth index .IGXadvanced by its biggest daily percentage gain since November 2022.

Shares of other companies, seen as beneficiaries of the AI boost, also got a shot in the arm. Nvidia's rival Advanced Micro Devices AMD.O, server component supplier Super Micro Computer SMCI.O and Arm Holdings ARM.O jumped.

Synopsys SNPS.Osoared after the software maker for chip designers after reporting estimate-beating earnings and outlook.

The Philadelphia Semiconductor index .SOX also jumped, as did Big Tech and growth stocks such as Alphabet GOOGL.O, Microsoft MSFT.O and Meta Platforms META.O.

Read Also: Infinite Living Program 2024 Sinar Mas Land Offers 20% Down Payment Subsidy


Meanwhile, investors' bets are tilted towards June as the starting point for the first rate cut from the Federal Reserve.

Fed Vice Chair Philip Jefferson said on Thursday he would be looking at the totality of incoming economic data in assessing the time for the U.S. central bank to begin cutting its benchmark policy rate.

Data showed the number of Americans filing new claims for unemployment benefits unexpectedly fell last week, suggesting a tight labor market.

Elsewhere, vaccine maker Moderna MRNA.O jumped after surprising investors with a fourth-quarter profit. The stock's technicals also pointed to a bullish outlook.

However, Rivian RIVN.O and Lucid LCID.O tumbled, after the electric vehicle startups forecast 2024 production well below analyst estimates on slowdown in demand.

By David French

(Reporting by Amruta Khandekar and Bansari Mayur Kamdar in Bengaluru and David French in New York; Editing by Shounak Dasgupta, Shinjini Ganguli and David Gregorio)

Editor: Hasbi Maulana

Latest News