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Stocks Rise as Bullish Nvidia Call Boosts AI Trade: Markets Wrap

(Bloomberg) — A rally in chipmakers drove stocks to another record, with traders betting the potential for Federal Reserve rate cuts will keep fueling the industry that has powered the equity market this year.

The S&P 500 came closer to the historic 5,500 mark. Nvidia Corp. became the world’s most-valuable company — topping Microsoft Corp. — to extend this year’s record-breaking surge. A bullish analyst call projected the firm at the heart of the artificial-intelligence boom will hit nearly $5 trillion in value in the coming year — from about $3.3 trillion. Bonds climbed as traders piled into a $13 billion sale of 20-year Treasuries.

Wall Street waded through mixed economic data that showed US industrial production increased, helped by a broad-based pickup in factory output. Separately, retail sales barely rose and prior months were revised lower. A chorus of Fed officials emphasized the need for more evidence of cooling inflation before lowering rates.

“Investors should lean toward the glass-half-full view, but recognize macroeconomic conditions, as well as the nuances across corporate profits, consumers, and incoming economic data may evolve in ways not fully discounted in asset prices at the moment,” said Anthony Saglimbene at Ameriprise.

On the eve of a US holiday, the S&P 500 hit its 31st all-time high of 2024. Nvidia climbed 3.5% after Rosenblatt Securities analyst Hans Mosesmann hiked his price target on the chipmaker to a Wall Street high of $200 from $140. Treasury 10-year yields fell seven basis points to 4.21%.

Bank of America Corp.’s institutional clients piled into US equities for the second week in a row, led by technology and social media shares, strategists including Jill Carey Hall wrote in a note to clients.

Separately, a BofA survey showed that global investors are likely to keep pumping money into record-hitting stock markets.

Answering a question about the asset class that would benefit most from a reallocation of money-market funds, 32% of respondents opted for US stocks. Another 19% said the cash would go into global equities, while a quarter of the respondents indicated they would buy government bonds.

There’s not much doubt in the market right now to curb the enthusiasm about the US stock rally driven by a small group of tech stocks. But some investors are increasingly looking for the ways to hedge the concentration risk.

And with each record, that concentration has tightened even more. The so-called Magnificent Seven companies have contributed more than 60% to the S&P 500’s return this year.

Corporate Highlights:

  • Boeing Co. Chief Executive Officer Dave Calhoun faced searing criticism in a Senate hearing that accused him of failing to overcome the company’s manufacturing shortcomings by putting profit ahead of safety.
  • Philip Morris International Inc. stopped online sales of its popular nicotine pouch brand Zyn in the US after receiving a subpoena in the District of Columbia related to flavored products that are banned there.
  • Dollar Tree Inc. continued to sell children’s applesauce tainted with “extremely high” levels of lead long after the company recalled the product due to contamination concerns, US regulators said.

Key events this week:

  • UK CPI, Wednesday
  • US Juneteenth holiday, Wednesday
  • China loan prime rates, Thursday
  • Eurozone consumer confidence, Thursday
  • UK BOE rate decision, Thursday
  • US housing starts, initial jobless claims, Thursday
  • Eurozone S&P Global Manufacturing PMI, S&P Global Services PMI, Friday
  • US existing home sales, Conf. Board leading index, Friday
  • Fed’s Thomas Barkin speaks, Friday

Some of the main moves in markets:


  • The S&P 500 rose 0.3% as of 4 p.m. New York time
  • The Nasdaq 100 was little changed
  • The Dow Jones Industrial Average rose 0.1%
  • The MSCI World Index rose 0.4%


  • The Bloomberg Dollar Spot Index fell 0.2%
  • The euro was little changed at $1.0738
  • The British pound was little changed at $1.2708
  • The Japanese yen was little changed at 157.85 per dollar


  • Bitcoin fell 3.2% to $64,239.48
  • Ether fell 2.6% to $3,420.52


  • The yield on 10-year Treasuries declined seven basis points to 4.21%
  • Germany’s 10-year yield declined two basis points to 2.40%
  • Britain’s 10-year yield declined seven basis points to 4.05%


  • West Texas Intermediate crude rose 1.4% to $81.49 a barrel
  • Spot gold rose 0.5% to $2,329.70 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Subrat Patnaik, Carmen Reinicke, Natalia Kniazhevich, Sagarika Jaisinghani, Jason Scott, Aya Wagatsuma, Robert Brand and Sujata Rao.

©2024 Bloomberg L.P.

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