US stocks held near record highs on Tuesday, as Nvidia (NVDA) surpassed Microsoft (MSFT) to become the most valuable public company.
Both the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) climbed in afternoon trading, up about 0.3% and 0.2%, respectively, after the benchmark index secured its 30th record close of 2024 while the tech-heavy Nasdaq aims to build on a sixth straight record close.
The Dow Jones Industrial Average (^DJI) also moved higher, up roughly 0.1%.
As of afternoon trading, Nvidia’s stock price rose more than 3.5% to north of $135 per share, giving the chipmaker a market capitalization just over $3.34 trillion. With a 0.2% slide on Tuesday, Microsoft’s market cap stood at around $3.33 trillion.
Techs have continued to lead an AI-driven rally that, as Yahoo Finance’s Myles Udland wrote, investors simply can’t afford to miss out on. The enthusiasm is leading several Wall Street banks to chase their year-end S&P targets higher, with one strategist saying the AI revolution is still in its “early innings.
Still, it wasn’t all positive news after May’s retail sales numbers disappointed.
Government data released on Tuesday showed that retail sales increased just 0.1%, missing economist expectations, Yahoo Finance’s Josh Schafer reported. Meanwhile, April’s numbers were revised to show a decline. It could be a sign of more consumer strain amid high interest rates and persistently stubborn inflation.
Also on Tuesday, a roster of Fed officials offered more commentary on the path of interest rates. Fed governor Ariana Kugler said she remained “optimistic that improving supply and cooling demand will support continued disinflation.”
“If the economy evolves as I am expecting, it will likely become appropriate to begin easing policy sometime later this year,” she said.
So far the message after last week’s rate decision and forecast update has been clear: Expect one rate cut in 2024. Investors seemingly haven’t yet taken this to heart, with over 60% still expecting two cuts by the end of the year, according to the CME FedWatch tool.
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Nvidia surpasses Microsoft to become most valuable stock
Nvidia (NVDA) is now the most valuable public company in the world.
The chip maker surpassed Microsoft’s (MSFT) market cap on Tuesday, just two weeks after it took the number two spot from Apple (AAPL).
Yahoo Finance’s Josh Schafer and Dan Howley with the story:
Nvidia’s stock price rose more than 3.5% to north of $135 per share, giving the chipmaker a market capitalization just over $3.33 trillion. With a 0.3% slide on Tuesday, Microsoft’s market cap stood at $3.32 trillion.
Nvidia surpasses Microsoft in market cap Shares of Nvidia are up more than 215% over the last 12 months and more than 3,400% over the last five years. Year to date, Nvidia has gained 173%; Microsoft stock is up just less than 19% in 2024.
Nvidia’s surge has made it a top weighting in the S&P 500 (^GSPC), and the chipmaker has served a pivotal role in the benchmark index hitting record highs in 2024.
Up until May, the S&P 500 had traded with a near-perfect correlation to Nvidia’s price movement, meaning that as Nvidia’s stock rose, so did the broader index. As of Monday, Nvidia’s stock gains alone had contributed about one-third of the S&P 500’s year-to-date rise, according to data from Citi’s equity research team.
Nvidia, which is the tech industry’s go-to supplier for AI chips and integrated software, completed a 10-for-1 split on June 10.
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