S&P 500 nears historic high thanks to Broadcom and Nvidia
Analysis: Why Wall Street is rising while most companies lose value
The U.S. stock market has climbed again solely due to renewed interest in shares of artificial intelligence companies.
However, only a few giants are driving the market upward. The S&P 500 (+0.6%) and Nasdaq (+1.2%) indices rose, yet most regular companies in the S&P 500 actually declined. The market was 'pulled up' specifically by major AI giants, which carry much greater weight in the indices.
In recent weeks, AI sector stocks have experienced significant volatility (investors fear that purchasing chips and building data centers amid high interest rates is becoming too expensive). But on Tuesday, this sector rebounded.
Broadcom (+4.2%) announced a massive $63 billion financial deal that will help the AI startup Anthropic gain access to its accelerators and networking equipment.
Nvidia (+0.8%) and CoreWeave (+8.5%) also showed strong growth amid the overall positive sentiment.
General Motors (+5.6%). The corporation is leaving the New York Stock Exchange (NYSE), where it has been traded since 1911, and moving to the tech-focused Nasdaq. This will allow it to position itself as a technology company and potentially enter the Nasdaq 100 index (which would prompt funds to massively buy its shares).
JetBlue (+20.3%). The airline reported summer losses worse than expected, but its shares surged because investors had anticipated an even worse scenario, and the CEO promised a return to sustainable profitability.
Royal Caribbean (+5.5%). The cruise operator performed exceptionally well over the summer and raised its annual forecast.
Boeing (-10.2%), Hilton (-2.6%), and Sherwin-Williams (-1.9%) declined due to weak quarterly reports, high credit rates, and reduced demand.
The market is now on hold awaiting the U.S. Federal Reserve's decision on interest rates. Analysts expect the Fed to pause and refrain from further rate hikes.
The price of Brent crude oil dipped slightly (-1.2%) to $109.41 per barrel, slightly easing pressure on the bond market.
