Tech stocks led gains in U.S. stocks on Monday ahead of the Federal Reserve’s key interest rate decision, as investors put aside concerns about stalling interest rates and focused on expectations about AI developments.
The benchmark S&P 500 index (^GSPC) rose almost 1%, and the tech-heavy Nasdaq Composite Index (^IXIC) rose 1.5%. The Dow Jones Industrial Average (^DJI) rose about 0.3%, signaling a recovery from Friday’s losses.
Stocks fell for a second straight week as higher-than-expected inflation and other data undermined confidence in the Fed’s policy change.
All eyes are now on the Fed’s March meeting, which starts on Tuesday, to see whether policymakers still expect three rate cuts in 2024. The central bank is expected to leave interest rates unchanged at their highest level in 23 years in Wednesday’s decision.
As chipmaker Nvidia’s (NVDA) annual conference kicks off on Monday, technologists are on the rise, driven by talk of AI. Meanwhile, Alphabet (GOOG) (GOOGL) stock rose after a Bloomberg report that Apple (AAPL) is in talks to include Google’s Gemini AI engine in its next iPhone.
Premarket trading on the Nasdaq, which holds stocks in Apple, Nvidia and other tech giants, was halted for nearly three hours before it was resolved due to a technical glitch that affected connectivity and orders.
Investors are also watching for Reddit’s public market debut on Thursday under the ticker “RDDT” to see if the new issue market is making a comeback. It is said that there are five times as many applications for IPOs.
Elsewhere in the market, the Bank of Japan is widely expected to end its negative interest rate policy and raise interest rates on Tuesday. Investors welcomed the outlook, with Japan’s Nikkei average (^N225) rising 2%.
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NVIDIA stock rises on AI expectations, Nasdaq rises
Stocks opened higher on Monday ahead of the Federal Reserve’s key policy meeting, helped by gains in Nvidia as enthusiasm for AI continues.
The S&P 500 (^GSPC) rose about 0.9%, and the tech-heavy Nasdaq Composite Index (^IXIC) rose 1.3%. The Dow Jones Industrial Average (^DJI) rose 0.4%.
Nvidia (NVDA) stock rose 4% as the chip maker kicked off its annual conference on Monday. Shares of Alphabet (GOOG) (GOOGL) soared more than 5% after reports that Apple (AAPL) is in talks to incorporate Google’s Gemini AI engine into its next iPhone.
Investors are keeping an eye on the US Federal Reserve’s March meeting, which begins on Tuesday. They are looking for clues about when policymakers expect to cut rates in 2024. Markets are widely expected to leave interest rates unchanged at a 23-year high in Wednesday’s decision.
FAANG COMPONENTS Remember Netflix?
Investors are so obsessed with Nvidia (NVDA) and Magnificent 7 that they may have forgotten about their old favorite FAANG component, Netflix (NFLX).
do not have everyone is forgetting about the streaming beast. The stock is up 23% since the fourth-quarter earnings report.
I liked some of the calls JPMorgan analyst Doug Anmuth made in a new note this morning.
The first was his reason for remaining bullish on Netflix stock.
“We remain positive on Netflix stock and our bullish case remains: 1) Healthy organic growth, paid share, and price increases will accelerate revenue growth in 2024; 2) Revenue growth across content, advertising, and gaming; Steady operating margin expansion balanced with growth investments; 3) multi-year free cash flow growth due to improved earnings and cash content discipline; 4) Netflix’s strong leadership position in streaming; 5) potential possibility become global television Netflix has expanded its membership base of 260 million to more than 500 million CTV households worldwide, excluding Russia and China. We believe that Netflix’s large scale, strong engagement (approximately 2 hours per day), and diverse content will allow the platform to become a global television over time, meaning that users default to viewing long-form video content. I believe that we will continue to promote it so that it becomes an option for people. ”
And his quick analysis of the upcoming Mike Tyson vs. Jake Paul fight that will air on Netflix:
“Netflix continues to enhance its sports content, primarily targeting sports entertainment and shoulder programming. Key examples include WWE Raw, F1: Drive to Survive, Full Swing, Break Point, Quarterback, Tour de France: Unchained, Netflix Slam, etc. Significantly, Netflix has partnered with Most Valuable Promotions (MVP) to host Jake Paul and Mike Tyson on July 20th, the third live sporting event in history. Streaming the headline heavyweight boxing mega-event. Given the unprecedented accessibility and NFLX’s global subscriber base, the idea is to stream the headline heavyweight boxing mega-event, while also attracting meaningful advertising dollars and seasonal Netflix’s current focus is on sports entertainment and content, but it doesn’t rule out a bigger push, which could incorporate live sports over time. It will be like this.”
Investors’ view of Nvidia could change again this week
If you ask most owners of Nvidia (NVDA) stock what the company does, they’ll likely say “chip maker.”
But that definition could change this week after Nvidia’s GTC conference starts today. And if NVIDIA’s market capitalization is to continue to grow beyond the impressive $2.2 trillion level we see today, things need to change.
In this regard, Ruben Roy, Technology Analyst at Stifel, says:
“While we believe it has become clear that NVIDIA is no longer a ‘chip’ company, the company’s hardware innovation, roadmap, and , time-to-market predictions are critical given recent coverage of the (AMD) GPU platform, various AI accelerator alternatives, and acceleration of captive AI silicon development efforts by most large CSPs. Nvidia is expected to address the potential for further diversification of its technology roadmap with potential custom application-specific silicon products. On this front, we believe this type of technology expansion makes sense, but considering the time and investment required to develop an ASIC business, we believe this is a long-term strategic initiative. ”
Coverage Reminder
Dan Howley, Yahoo Finance’s resident Nvidia expert and technology editor, resides at GTC. Be sure to follow his reporting on our platforms and his X. @Daniel Howley. Read his GTC preview here.
