Wednesday, July 24, 2024

Stock market today: Nvidia shares surge and set off a rally on Wall Street

by Associated Press

NEW YORK (AP) — Nvidia sparked a rally on Wall Street Thursday after the AI chipmaker reported another blowout quarter.

The S&P 500 rose 1.5% in morning trading. The big gain puts the benchmark index on track for another record high while pushing it into winning territory for the week after two lackluster days.

The Dow Jones Industrial Average rose 248 points, or 0.6%, to 38,857 as of 10:57 a.m. Eastern. The tech-heavy Nasdaq jumped 2.2%.

Nividia surged 15.1% after reporting that its revenue and profit soared in the latest quarter thanks to booming demand for its chips used for artificial intelligence. The stock has tripled over the past year thanks to a surge in investor enthusiasm over artificial intelligence.

Synopsis, which makes software used to test and develop chips, rose 10.7% after raising its profit forecast.

Other chipmakers and companies involved in the chipmaking industry gained ground. Advanced Micro Devices rose 10% and Lam Research rose 3.6%.

Overnight, Japan’s Nikkei 225 surged to an all-time high. Record gains in corporate earnings have enhanced the appeal of shares in Japanese companies, along with the weakness of the Japanese yen against the U.S. dollar.

Markets in Asia and Europe gained ground.

Bond yields were relatively steady. The yield on the 10-year Treasury fell to 4.31% from 4.32% late Wednesday.

On the losing end, electric truck and SUV maker Rivian tumbled 26.7% after it reported another loss and issued a weaker-than-expected production outlook. Lucid, another electric vehicle manufacturer, slid 18.2% after it missed Wall Street sales forecast and also gave a weaker production estimate than analysts had called for.

Online craft marketplace Etsy slipped 7.4% after it missed Wall Street’s profit forecast by a wide margin.

Technology stocks have been the driving force behind the market’s rally that started in October. Solid earnings from some of the biggest names in the sector are helping justify and reinforce those big gains.

Wall Street expects just under 4% growth for earnings in the overall S&P 500 during the fourth quarter. The communication services sector, which includes Google’s parent Alphabet, is expected to report 45% growth. Information technology companies, which include Nvidia, are expected to notch 22% growth.

“The near-term momentum in AI-related stocks is likely to continue,” said Solita Marcelli, chief investment officer for the Americas at UBS Global Wealth Management.

Nearly 90% of companies in the S&P 500 have reported earnings. There are still a few big names on deck this week. Online travel giant Booking Holdings and TurboTax maker Intuit will report later Thursday.

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