S&P 500, Nasdaq end higher as Nvidia surge leads megacap gains
The S&P 500 and the Nasdaq closed higher on Monday as shares of chipmaker Nvidia jumped following a bullish note from Morgan Stanley, leading other megacap growth stocks higher as investors awaited earning reports from U.S. retailers.
Nvidia’s (NVDA.O) gain pushed the information technology index (.SPLRCT) higher, making it the strongest of 11 S&P 500 sector indexes.
Other megacap growth stocks including Alphabet (GOOGL.O), and Amazon.com (AMZN.O) also posted gains, as did chipmaker Micron Technology (MU.O).
According to preliminary data, the S&P 500 (.SPX) gained 26.28 points, or 0.59%, to end at 4,490.33 points, while the Nasdaq Composite (.IXIC) gained 143.81 points, or 1.05%, to 13,788.66. The Dow Jones Industrial Average (.DJI) rose 30.38 points, or 0.09%, to 35,311.78.
“It’s the first day in a while that tech has really significantly outperformed,” said Jay Hatfield, CEO of Infrastructure Capital Advisors in New York.
“That’s indicative of the fact that you have this blockbuster Nvidia report coming up and that could support the tech market pretty substantially.”
Nvidia, one of several tech companies rallying this year on optimism about artificial intelligence, is due to report quarterly results next week.
“NVIDIA remains our top pick, with a backdrop of the massive shift in spending towards AI, and a fairly exceptional supply-demand imbalance that should persist for the next several quarters,” Morgan Stanley analysts said in a note on Monday.
The Nasdaq and S&P 500 fell last week after hotter-than-expected U.S. producer prices data fanned concerns that the Federal Reserve could keep U.S. interest rates higher for longer.
Tesla (TSLA.O) bucked the session’s upward trend, falling after the electric automaker said it had cut prices in China for some Model Y versions.
Market focus this week will be on quarterly earnings from major U.S. retailers including Walmart (WMT.N) and Target (TGT.N).
Expected economic data includes retail sales for July that will shape expectations for the direction for U.S. interest rates.
Traders see a nearly 89% chance that the Fed will keep its interest rates unchanged next month, according to CME Group’s Fedwatch tool.
Goldman Sachs’ latest report said its baseline forecast calls for the Fed to start cutting the funds rate inthe second quarter of 2024.
Keeping a lid on global market sentiment, investors remained concerned about China’s highly leveraged property sector after the country’s top private property developer, Country Garden, sought to delay payment on a private onshore bond for the first time.
PayPal Holdings (PYPL.O) rose after the company named Alex Chriss, a top executive at tax-preparation software firm Intuit (INTU.O), as its new chief executive officer.
AMC Entertainment common shares (AMC.N) tumbled. On Friday, a Delaware judge approved the theater chain’s revised stockholder settlement. The company’s preferred stock surged.
Hawaiian Electric Industries (HE.N) shares plunged as scrutiny mounted over whether the utility’s equipment played any role in deadly wildfires that burnt through the coastal Maui town of Lahaina.