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A person looks at the NVIDIA Grace Hopper superchip at the Gigabyte booth at COMPUTEX 2023 in Taipei.
new york
CNN
—
U.S. stocks rose to new highs on Thursday after No. 3 Nvidia beat profit estimates, boosting optimism among Wall Street investors.
The S&P 500 and the Dow Jones Industrial Average both hit record highs, and the tech-heavy Nasdaq is on track to hit its own all-time high set in November 2021.
The Dow Jones Industrial Average closed up 457 points, or 1.2%. The S&P 500 index rose 2.1%, and the tech-heavy Nasdaq Composite Index rose 3%.
The S&P 500 and Nasdaq both hit their highest levels in more than a year, and the Dow Jones Industrial Average topped the $39,000 mark for the first time.
Nvidia (NVDA) also reported extraordinary profit growth, fueled by the artificial intelligence boom, soaring 16.4% to a new all-time high.
The company gained $277 billion in value on Thursday alone, the largest increase in trading hours on record.
Nvidia, the chipmaker whose technology is being used to power AI, mentioned the term 67 times before taking questions on Wednesday’s earnings call.
Nvidia CEO Jensen Huang said in a statement Wednesday night that generative AI is now “reaching a tipping point” and expects further growth in the future. “Demand is surging around the world, across companies, industries and countries,” he said.
The California-based company saw take-home income increase 769% year-over-year and full-year profit increased more than 580% year-over-year.
Other chipmakers also benefited from Nvidia’s good news. As of Thursday morning, AMD (AMD) stock was up 10.7% and Microsoft (MSFT) was up 2.4%.
Tech stocks also rose. Meta and Amazon rose 3.9% and 3.6%, respectively, while Apple stock rose 1.1%.
But some businesses were left out of the fun. Intel, which unveiled plans to compete with Nvidia at a conference on Wednesday, fell 1.1%.
The Nvidia-led rally has put worries about the Federal Reserve keeping long-term interest rates high for now on the back burner, but traders learned some disappointing news Wednesday.
Fed officials remained concerned during last month’s policy meeting that inflation could remain stubbornly high, according to minutes released yesterday afternoon. That could keep interest rates at 23-year highs for longer than previously expected, impacting the cost of borrowing for Americans on everything from car loans to home mortgages.
Many traders now expect the Fed to begin cutting rates in June or July, rather than at its May policy meeting, according to the CME FedWatch tool.
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