Record highs in US stock markets fueled by enthusiasm for AI drive gains
The S&P 500 and the tech-heavy Nasdaq both reached new record highs, with Nvidia closing above $2 trillion for the first time
US stock markets closed at record highs on Friday, driven by investors’ ongoing enthusiasm for artificial intelligence (AI).
Both the S&P 500 and the tech-heavy Nasdaq achieved new records, with the Nasdaq surpassing its previous peak in 2021. This surge was fueled by gains for Meta, the owner of Facebook, and Nvidia, the leading AI chipmaker.
Nvidia’s market value exceeded $2 trillion for the first time, having doubled in nine months. Shares of competitor Advanced Micro Devices also reached a record high, and the broader Philadelphia Semiconductor Index set a new record.
All three major indexes, including the Dow Jones, recorded their fourth consecutive month of gains in a rally primarily driven by growth prospects associated with AI.
Markets have found support in a resilient economy, as investors attempt to assess the timing of the Federal Reserve’s first interest rate cut, currently targeted for June. There is an expectation that the central bank can manage a gentle economic slowdown.
“Because the economy is performing well and inflation remains somewhat persistent, the Fed is likely to be cautious in reducing interest rates,” said Sam Stovall, chief investment strategist at CFRA Research in New York.
“This approach is positive because it allows for a gradual transition away from higher interest rates without the need for aggressive rate cuts.”
Preliminary data shows that the S&P 500 rose by 41.16 points, or 0.81%, to close at 5,137.43 points, while the Nasdaq Composite increased by 183.02 points, or 1.14%, to 16,272.22. The Dow Jones Industrial Average also saw a rise of 90.43 points, or 0.24%, to 39,088.11.
