Big tech is set to make a comeback after Nvidia Corp. posted strong results and a positive outlook, which has restored confidence in the artificial-intelligence frenzy that has driven the stock market resurgence. Nvidia’s stock soared in late trading after predicting another sales gain for the current quarter. This has led to a boost in the Nasdaq 100, with Goldman Sachs Group Inc.’s trading desk calling the chipmaker “the most important stock on planet earth.” Nvidia is part of the “Magnificent Seven” group of megacaps, and has been responsible for one-third of the Nasdaq 100’s gain this year.
The S&P 500 staged a rebound just before the close of regular New York trading on Wednesday. Traders are now hopeful that Nvidia’s results will spur a recovery in the tech megacaps after a recent slump. The “Magnificent Seven” is only nearing — but not yet at — levels that may lead it to pop, according to Bank of America Corp. strategist Michael Hartnett. Other big-tech companies such as Microsoft Corp., Meta Platforms Inc., Alphabet Inc., Amazon.com Inc. and Apple Inc. have also seen large stock rallies as investors expect these companies to harness the power of generative AI to boost profits.
The latest Federal Reserve minutes showed that officials are in no rush to cut rates, and Treasury yields climbed after a $16 billion sale of 20-year bonds. Rivian Automotive Inc. revealed plans to cut 10% of its salaried workforce and set production guidance well below Wall Street’s expectations as the maker of electric vehicles grapples with stagnant demand and economic turbulence. Intel Corp. has landed Microsoft Corp. as a customer for its made-to-order chip business, marking a key win for an ambitious turnaround effort under Chief Executive Officer Pat Gelsinger.
Cisco Systems Inc. is selling $13.5 billion of bonds in the US high-grade debt market to partly finance its proposed $28 billion acquisition of Splunk Inc., as issuers rush to capitalize on strong investor demand. Boeing Co. ousted the head of its 737 Max program after a midair blowout of a fuselage panel on an Alaska Airlines jet led to withering scrutiny of the manufacturing quality of the planemaker’s most important model. Luxury homebuilder Toll Brothers Inc. said it’s optimistic about its prospects for a key selling season. HSBC Holdings Plc reported fourth-quarter profit fell 80% after taking unexpected charges on holdings in a Chinese bank and from selling its French retail operations. Shares slid in London.
Palo Alto Networks Inc., a cybersecurity company, cut its annual revenue forecast, stoking concerns that customers are reining in spending despite an uptick in attacks. Mercedes-Benz Group AG plans to buy back as much as €3 billion ($3.2 billion) worth of stock, extending moves to reward shareholders after cash flow exceeded expectations.
Some of the main moves in markets include the S&P 500 rising 0.1% as of 4 p.m. New York time, the Nasdaq 100 falling 0.4%, the Dow Jones Industrial Average rising 0.1%, and the MSCI World index remaining little changed. The Bloomberg Dollar Spot Index was little changed, the euro was little changed at $1.0818, the British pound was little changed at $1.2634, the Japanese yen fell 0.1% to 150.19 per dollar. Bitcoin fell 2% to $50,990.31, Ether fell 2.7% to $2,908.32. The yield on 10-year Treasuries advanced four basis points to 4.32%, Germany’s 10-year yield advanced eight basis points to 2.45%, and Britain’s 10-year yield advanced six basis points to 4.10%. West Texas Intermediate crude rose 1.3% to $78.04 a barrel, and spot gold was little changed.
