Nvidia’s stock surged to a record high, propelling the Nasdaq Composite to new heights. The broader market, however, showed mixed results as bond yields spiked and Federal Reserve officials made hawkish comments on interest rates.

Key Takeaways

• Nvidia’s stock soared over 7%, closing at a record high above $1,100.
• The Nasdaq Composite reached a new record, while the Dow Jones Industrial Average fell over 200 points.
• Treasury yields spiked, with the 10-year yield rising above 4.5%.
• Federal Reserve officials indicated that interest rate hikes are still on the table.

Nvidia’s Meteoric Rise

Nvidia’s stock surged by more than 7% during Tuesday’s trading session, closing at a record high above $1,100. The rally was fueled by news that Elon Musk’s xAI artificial intelligence firm will use Nvidia chips in its computers. This development further solidified Nvidia’s position as a leader in the AI chip market.

Mixed Market Performance

While Nvidia’s performance lifted the Nasdaq Composite to a new record, the broader market showed mixed results. The Dow Jones Industrial Average fell by over 200 points, or 0.6%, weighed down by a spike in Treasury yields and hawkish comments from Federal Reserve officials.

Bond Yields and Federal Reserve Comments

Treasury yields spiked during the session, with the 10-year yield rising above the key 4.5% threshold. The increase in yields was attributed to tepid demand at the latest Treasury auction and hawkish comments from Federal Reserve officials. Minneapolis Fed President Neel Kashkari reiterated that the central bank is not convinced that inflation is falling quickly enough to warrant rate cuts. He also mentioned that more rate hikes are not off the table if inflation does not show signs of easing.

Broader Market Implications

The mixed market performance highlights the ongoing concerns about inflation and interest rates. Investors are closely watching the upcoming Personal Consumption Expenditures (PCE) price index report, which is the Fed’s preferred measure of inflation. The report is expected to provide important insights into when the Fed might consider cutting rates.

Other Market Movers

• S&P 500: Closed at 5,306.04, up less than 0.1%.
• Dow Jones Industrial Average: Fell to 38,852.86, down 0.6% (217 points).
• Nasdaq Composite: Closed at 17,019.88, up 0.6%.
• West Texas Intermediate Crude Oil: Jumped 3% to $80.19 a barrel.
• Brent Crude: Increased by 1.6% to $84.48 a barrel.
• Gold: Increased 1% to $2,358.30 per ounce.
• Bitcoin: Dropped 2% to $68,117.27.

Conclusion

Nvidia’s record-breaking performance has provided a significant boost to the Nasdaq Composite, but the broader market remains cautious amid rising bond yields and uncertain interest rate policies. Investors will be closely monitoring upcoming economic reports for further direction.

Sources

• Stock market today: Nvidia, Nasdaq reach record highs as AI rally continues, Yahoo Finance.
• Stock Market Ends Mixed As 10-Year Yield Jumps; Nasdaq Hits All-Time High, Buoyed By Nvidia | Investor’s Business Daily, Investor’s Business Daily.
• Stock market today: Nasdaq hits record, Dow tumbles as bond yields spike, markets.businessinsider.com.
• Stock Market News From May 28, 2024: Dow Slips, Nasdaq Hits Record; GameStop, Nvidia, Apple, Tesla, T-Mobile, and More Movers; Treasury Yields Fall, Barron’s.
• Dow Jones Futures Fall After Surging Nvidia Masks Market Weakness; Cava Slides Late | Investor’s Business Daily, Investor’s Business Daily.