Stocks Surge as Dow Rises by 400 Points, Marking Best Day of 2024 following Nvidia’s Impressive Earnings Report
In a remarkable turn of events, the stock market experienced a surge on Thursday, with the Dow Jones Industrial Average and S&P 500 index on track for another round of records. This impressive performance came after Nvidia Corp.’s blowout earnings report, which unleashed a wave of optimism that drove global markets higher.
The Dow Jones Industrial Average added a staggering 400 points, or 1%, reaching a trading level of 39,012. Meanwhile, the S&P 500 rose by 100 points, or 2%, reaching 5,082. The Nasdaq Composite also saw a significant surge, gaining 446 points, or 2.9%, and reaching 16,025.
Just the previous day, the S&P 500 and Dow managed to eke out gains and avoid a third consecutive day in the red, while the Nasdaq Composite wasn’t as fortunate. However, the market sentiment quickly changed with Nvidia’s impressive earnings report.
Nvidia, known for its prowess in artificial intelligence (AI) technology, delivered revenues, profits, and forecasts that exceeded analysts’ already-elevated expectations. This news triggered a relief rally across the market, with growth and momentum names leading the charge. On the back of this positive report, shares of Nvidia surged by 15% in afternoon trade, boosting the company’s market capitalization by over $230 billion. This increase puts Nvidia on track to surpass Meta Platforms Inc.’s nearly $200 billion gain from earlier this month, which was the largest one-day increase in market cap in U.S. stock market history.
The impact of Nvidia’s earnings report was felt worldwide, as semiconductor stocks from Japan to Europe experienced significant increases. The Nasdaq Composite also came within striking distance of its first record close since November 2021. Both the Nasdaq and the S&P 500 were poised to achieve their biggest daily advances of 2024, according to Dow Jones Market Data.
The positive news from Nvidia’s earnings report created a global risk-on surge, propelling Japan’s and Europe’s benchmark equity barometers to record levels. Brad Conger, deputy chief investment officer at Hirtle, Callaghan & Co., noted that there is a clear “silicon tailwind,” with everything in the semiconductor supply chain experiencing gains.
Following the impressive performance of Nvidia, analysts predict that the AI rally will continue to push stocks higher. There is a sense of fear of missing out (FOMO) among investors, making it advisable not to get in front of this rally.
In addition to Nvidia’s impact on the market, Thursday also saw some notable economic updates. Weekly jobless claims fell to a five-week low at 201,000, indicating a positive trend in the labor market. Flash services and manufacturing PMIs for February suggested that the U.S. economy is likely to continue expanding at an above-average pace this month. Furthermore, existing-home sales rose more than 3% in January, reaching their highest level since August, as buyers took advantage of lower mortgage rates.
Looking ahead, there are expectations that the Federal Reserve will begin cutting rates in 2024. However, Fed Vice Chair Philip Jefferson warned that progress on inflation could stall if consumer spending fails to weaken. Various Fed officials, including Philadelphia Fed President Patrick Harker, Fed Gov. Lisa Cook, and Minneapolis Fed President Neel Kashkari, are scheduled to speak later in the day.
In terms of individual stocks, there were some notable winners and losers following Nvidia’s earnings report. Newmont Corp. saw shares slump after announcing plans to cut its dividend and sell off noncore assets. Electric-vehicle maker Rivian Automotive Inc. also experienced a setback, with shares losing over a quarter of their value after reporting a larger-than-expected quarterly loss and providing guidance that suggests slightly fewer cars will be produced in 2024 compared to the previous year.
On the other hand, Moderna Corp. shares jumped after the company reported a surprise quarterly profit and sales that surpassed Wall Street’s expectations. Wayfair Inc. also experienced a boost, with shares soaring after the online home-furnishings retailer reported a narrower-than-expected fourth-quarter loss and positive active-customer growth after a two-year decline.
Overall, the market’s surge following Nvidia’s impressive earnings report showcases the power of AI technology in driving investor sentiment. With stocks reaching new heights and global markets experiencing a risk-on surge, it seems that the AI rally is far from over. Investors are advised to stay tuned and not miss out on the potential gains offered by this growing sector.
