The S&P 500 and Nasdaq closed with gains on Thursday, following a strong performance by graphics chip giant Nvidia, which propelled megacap stocks higher and boosted investor sentiment significantly.
Nvidia Corp, known for its high-performance chips, ended the session a staggering 11% higher. The firm reported fiscal fourth-quarter revenue that comfortably beat Wall Street estimates, driven by robust demand for its chips used in data centres and cryptocurrency mining. Additionally, the firm’s forecast for the current fiscal first quarter was also higher than analysts’ predictions, which spurred the surge in Nvidia’s shares.
This sharp increase in Nvidia’s stock price contributed to an upward movement in the wider semiconductor sector. An uptick was seen in Advanced Micro Devices Inc and Intel Corp, with their shares climbing 1.9% and 1.6% respectively.
The overall increase in megacap stocks resonated positively on Wall Street. The Dow Jones Industrial Average rose 0.07% to 31,449.65, the S&P 500 gained 0.29% to reach 3,914.29 and the Nasdaq Composite added 0.69% to end at 14,009.73. However, the energy sector stood out as a laggard, with a decline of 1.4%, mainly due to a drop in crude oil prices.
Among the eleven major sectors in the S&P 500, eight ended the session higher. Moreover, of the S&P’s most heavily weighted constituents, Amazon.com Inc and Microsoft Corp gave the largest lift, while a drop in Exxon Mobil Corp and Chevron Corp presented the most significant drag.
This positive uptick in Wall Street in Thursday’s session was a stark contrast to recent concerns surrounding inflation, which were sparked by indications that the Federal Reserve might need to tighten monetary policy earlier than anticipated. However, the central bank’s consistent message of patience appears to have calmed the market nerves for now.
Market watchers view the latest rise in indexes as an encouraging sign of economic recovery from the pandemic. The strong performance from tech giants like Nvidia, combined with reassuring news from the Federal Reserve, appears to have set a positive tone for investors.
It’s worth noting that Wall Street is heading into a three-day weekend due to Monday’s Presidents Day holiday. With news of improving corporate earnings and positive economic data, investors are hoping the momentum will continue into the extended break and beyond.
In conclusion, the rise in the S&P 500 and Nasdaq has been led by a surge in megacap stocks, particularly Nvidia. Tech giants continue to play a leading role in driving the market upwards, and this surge contributes to fostering optimism for continued market recovery