U.S. stock markets closed at a record high on Monday, continuing the trend for three straight days. The Fed rate cut last week and indications of further easing of policies boosted investors’ confidence in risky assets like equities. A major AI deal further strengthened market participants’ sentiment. All three major stock indexes ended in positive territory.
The Dow Jones Industrial Average (DJI) rose 0.1% to close at 46,381.54, marking a new closing high for the index. Notably, 12 components of the 30-stock index ended in positive territory, while 18 finished in negative territory. At the intraday high, the blue-chip index recorded a new all-time high of 46,447.13.
The tech-heavy Nasdaq Composite finished at 22,788.98, rising 0.7% or 157.50 points driven by the strong performance of technology bigwigs. This marked a new closing-high for the index. At the intraday high, the tech-laden index recorded a new all-time high of 22,801.90.
The S&P 500 advanced 0.4% to finish at 6,693.75. This marked the benchmark’s new closing high. At the intraday high, the benchmark index recorded a new all-time high of 6,698.88. Out of the 11 broad sectors of the broad-market index, nine ended in negative territory, while two were in positive territory. The Technology Select Sector SPDR (XLK) gained 1.3% while the Energy Select Sector SPDR (XLE) and the Consumer Staples Select Sector SPDR (XLP) fell 1.8% and 1%, respectively.
The fear gauge, the CBOE Volatility Index (VIX) was up 4.2% to 16.10. A total of 18.65 billion shares were traded on Monday, higher than the last 20-session average of 17.50 billion. Advancers outnumbered decliners on the NYSE by a 1.22-to-1 ratio. On the Nasdaq, a 1.38-to-1 ratio favored advancing issues.
NVIDIA Corp. NVDA — the undisputed global leader of the generative artificial intelligence (AI)-powered graphical processing units (GPUs) — has decided to invest up to $100 billion in ChatGPT founder Open AI to enable the latter to install data centers using the chip behemoths AI-powered GPUs. The NVDA system requires 10 gigawatts of power.
CNBC reported citing NVDA CEO Jensen Huang that 10 gigawatts is equal to between 4 million and 5 million GPUs. This is the amount of chips that NVIDIA will ship this year to Open AI. Huang along with Open AI CEO Sam Altman and President Greg Brockman said “This is a giant project.”
This massive deal once again reaffirmed that the AI frenzy is rock solid enabling stock investors to reap long-term benefits. Following the news, the stock price of NVDA advanced 3.9%. NVDA currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
