The broad market index gained 1.18% to close at 5,354.03, a new record
The S&P 500 rose to a new record Wednesday as Nvidia led major tech stocks higher and slightly weak labour market data gave investors hope the Fed might move to cut interest rates later this year.
The broad market index gained 1.18% to end at 5,354.03, a new record. The S&P 500 also touched a fresh intraday all-time high of 5,354.16. The new records come after the index suffered through a couple of sluggish weeks, and it is now 12.3% higher year to date.
The Nasdaq Composite gained 1.96% to 17,187.90, also a new record, as Nvidia shares climbed. The DJIA trailed a bit as stocks outside of technology underperformed, gaining 96.04 points, or 0.25%, to close the session at 38,807.33.
Nvidia continued its AI-driven run, adding more than 5% to reach a fresh record and hit a $3 trillion market value. The chipmaker unveiled new chips to start the week, which received more accolades from Wall Street analysts. BoA said Nvidia could rally to $1,500, reflecting upside of more than 22% from Wednesday’s close.
Private payroll data from ADP showed hiring slowed to 152,000 jobs last month, far below the 175,000 economists polled by Dow Jones anticipated. The data is the latest sign of weakness in the labour market that investors hope will give the Fed enough evidence to lower benchmark interest rates.
Fed funds futures trading now indicates a nearly 70% probability that central bank policymakers will ease back from the current target rate of 5.25% to 5.5% in September, as per the CME FedWatch Tool. Attention will turn to weekly jobless claims numbers on Thursday and Friday’s all-important May jobs report.
We see the S&P 500 reaching 5,500 by year-end amid Fed rate cuts, robust profit growth, and the secular growth trend brought by AI, UBS Global Wealth Management CIO Solita Marcelli stated in a note on Wednesday.
UBS expects the Fed to lower rates twice this year, providing “a healthy backdrop for stocks,” Marcelli said.
