By BEN SHIMKUS, US CONSUMER REPORTER and AP
Wall Street climbed again Wednesday as stocks hit all-time highs — with the S&P 500 closing at a record for the 11th time this year.
Shortly afterward, tech giant Nvidia — the first company to reach a $4 trillion valuation — reported what appeared to be blockbuster earnings.
But surging profits were overshadowed by fears that its sales might have peaked as its customers like Microsoft and Google develop their own advanced AI chips.
That concern sent Nvidia’s stock down slightly, and also knocked the S&P 500 off its highs in after-hours trading. They did pare losses but were still down at 6pm.
Investors are watching Nvidia closely because its results are seen as a gauge for the strength of the tech sector and the broader economy.
Strong earnings suggest companies are willing to spend on technology and AI, which can lift revenues across industries and boost stock prices overall.
Nvidia makes a majority of the world’s AI-capable chips. That business has raked in $26.42 billion in the past three months, up 59 percent compared to last year. Executives expect to make $54 billion in profit this year.
Earlier in the day, the S&P 500 — a benchmark index of the 500 largest US companies and a key part of many Americans’ retirement accounts — rose 0.2 percent, pushing past the record it set two weeks ago.
Investors turned in modest gains today, pushing the stock market over its previous records
The Dow Jones Industrial Average also rose 0.3 percent, and the Nasdaq composite closed 0.2 percent higher.
Technology companies led today’s positive stock movement, outweighing declines in communication services and retail sectors.
Stocks have been climbing after Federal Reserve Chairman Jerome Powell hinted last week that interest rates could be cut more than expected. Lower rates make borrowing cheaper for businesses and consumers. Companies can invest more in growth, while shoppers have more money to spend.
That’s a boost to the US economy, which is why stocks have been rising.
A rising stock market benefits retirement accounts like 401(k)s and IRAs, which are heavily invested in major indices such as the S&P 500, Dow Jones, and Nasdaq.
However, stocks have also remained relatively non-reactive to the ongoing warnings that continue to undergird the economy.
Jobs numbers last month were unexpectedly murky, inflation continues to rise, and the housing market is starting to worry contractors.
Plus, President Donald Trump has continued to ramp up his attacks on the Fed’s independence.