The Nasdaq and S&P 500 closed at record highs on Tuesday, driven by Nvidia’s surge to new peaks. Nvidia surpassed Microsoft to become the world’s most valuable company with a market capitalization of $3.22 trillion. Other chip stocks like Qualcomm, Arm Holdings, and Micron also saw gains, with Micron hitting a record high.
The Nasdaq marked its seventh consecutive record closing high as chip stock gains offset losses in other tech giants like Alphabet, Amazon, and Meta Platforms. U.S. retail sales rose by 0.1% in May, falling short of the 0.3% growth forecast, but industrial production and manufacturing output showed strong growth.
Despite softer retail sales data, markets slightly increased bets on two Federal Reserve interest rate cuts this year. Financial and technology sectors led the gains in the S&P 500, while communication services and consumer discretionary sectors lagged behind.
Hopes for multiple rate cuts, excitement for AI-related companies, and strong earnings from tech firms have boosted equities in recent months. Citigroup raised the year-end target for the S&P 500 to 5,600 points from 5,100.
In terms of stock movements, Chegg saw a 3.45% increase after announcing job cuts, while Lennar fell 4.98% following a lower-than-expected forecast for third-quarter home deliveries.
Overall, advancing issues outnumbered decliners on the NYSE, with strong volume on U.S. exchanges. U.S. markets will be closed on Wednesday for the Juneteenth holiday.