The S&P 500 surged to new highs on Thursday led by a blowout quarter from Nvidia, which propelled the broader market and the entire tech sector.
The benchmark index gained 2.11%, its best day since January 2023 to close at 5,087.03. UBS has set the highest target on the S&P 500 for the year, at 5,400.
Nvidia's results also led the Nasdaq higher, with the index advancing over 3% overnight, marking its best single day gain since February 2023. The Nasdaq is just 15 points away from its own record high.
The Dow Jones crossed the 39,000 mark for the first time, gaining 1.2% overnight.
Nvidia's shares surged 16% overnight, adding $277 billion to its market value in a single day, surpassing Meta's record of $197 billion just 20 days prior. Other tech stocks also rallied in lieu of Nvidia's performance. Meta and Amazon's shares gained close to 4% each, while Microsoft and Netflix rose 2%.
Phillip Colmar of MRB Partners noted equities are benefiting from earnings growth and firmer economic activity than was expected. He said, however, that stocks could still drop if economic growth eventually becomes priced into higher bond yields.
“The mega cap U.S. stocks, or the ‘Magnificent 7,’ they are frothy. They have very elevated earnings expectations and very elevated valuations that doesn’t give any room for disappointment,” Colmar said. He noted that the Nvidia-fueled market rally still carries “inherent risk” to it, given the cyclical nature of semiconductor stocks.
(With Inputs From Agencies.)
