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Wall Street crowned new records and Nvidia became the most valuable company

Wall Street crowned new records and Nvidia became the most valuable company
Wall Street crowned new records and Nvidia became the most valuable company

In a quiet session ahead of tomorrow’s Juneteenth holiday, which commemorates the abolition of slavery in the US, US stocks were little changed, although they hit new records after the release of weak retail sales data raised concerns about the strength of the country’s economy (but will also increase the chances of interest rate cuts this year)

In this context, the Dow Jones industrial index ended at 38,834.86 points, gaining 0.15%, the S&P500 stood at 5,487.03 points, rising 0.25%, and the Nasdaq Composite appreciated 0.03%, reaching 17,862.23 points.

Retail sector shows weakness

U.S. retail sales rose at a slower-than-expected monthly pace in May, rising 0.1%, an improvement from a downwardly revised 0.2% decline in April.

Economists had forecast that retail sales, which primarily reflect goods and are not adjusted for inflation, would grow 0.3%. The weak retail sales figure could affect the outlook for the broader economy, which in turn could influence how the Federal Reserve would approach potential interest rate cuts later this year.

The Fed’s voices continue to be heard

On Monday, Philadelphia Fed President Patrick Harker backed a 25 basis point cut in 2024, echoing a median rate forecast for the rest of the year that was released by policymakers last week.

New York Federal Reserve President John Williams said Tuesday that interest rates will lower gradually over time, but he declined to say when the central bank may begin the process of easing monetary policy. “I expect interest rates to gradually decline over the next two years, reflecting the fact that inflation is returning to our 2% target and the economy is moving on a very strong and sustainable path,” Williams said in an interview. on the Fox Business television channel.

Asked whether the Fed will meet current market expectations for a rate cut in September, Williams said, “I’m not going to make a prediction” about the exact path of monetary policy. What happens “depends on how the data evolves,” she said, adding that “I think things are going in the right direction” for eventual easing.

He also added that for the Fed “the number one task is to ensure that inflation returns to 2%” and rejected the idea that the institution will tolerate inflation remaining around the 3% level.

Tesla fights over CEO Elon Musk’s pay package In the corporate sector, Tesla shares fell 1.5% after the electric car maker began its battle for legal recognition of the CEO’s massive $56 billion pay package. CEO Elon Musk, as shareholders voted in favor of the compensation deal after a judge had previously voided the payment earlier this year.

Elsewhere, Chegg shares rose 4.2% after the edtech group announced plans to cut 23% of its global workforce as part of a broader restructuring initiative. Lennar shares fell more than 5% after the homebuilder forecast its third-quarter residential deliveries would be below expectations, a sign that demand for new homes is expected to remain sluggish while Mortgage rates are at their highest level in two decades.

GameStop shares fell 2.4%, continuing heavy losses from the previous session, after CEO Ryan Cohen told investors that the video game retailer plans to operate a smaller store network.

Yesterday it was Apple, today Nvidia reached the podium

The semiconductor designer Nvidia became the largest market capitalization in the world this Tuesday, surpassing Apple which did so yesterday and Microsoft, these companies are a symbol of the fever for generative artificial intelligence (AI) that drives the markets.

The valuation of the mega company reached 3.338 billion dollars, according to a calculation by the Agence France-Presse around 5:30 p.m. Greenwich Mean Time (GMT) when its shares rose 3.4%. In any case, Nvidia has yet to reach the absolute record that Apple reached on Monday, at $3.376 billion.

Since OpenAI’s chatbot ChatGPT was launched in November 2022, Nvidia’s price has increased eightfold, thanks to the popularity of its powerful microchips. The recent split of its shares by 10, on June 7, contributed to further increasing the company’s value by fueling demand for a more accessible title.

“Nvidia GPU microchips are the new gold or the new oil of the technology sector,” consider analysts at Wedbush Securities. For them, Nvidia, Apple and Microsoft are “in the race towards $4 trillion in stock market value.”

Source: Ambito

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