US close: Nvidia lifts S&P 500 and Nasdaq to new heights

dl wall street bull wall st new york city nyc ny new york stock exchange nyse nasdaq stocks shares financie us usa america pb — Sharecast / Alexander Naumann via Pixabay

US stock inched higher on Tuesday with the S&P 500 and Nasdaq eking out new record highs on the back of yet more gains from Nvidia, which surpassed Microsoft as the world's most valuable listed company.

Nvidia was up 3.5% at yet another record closing high of $135.58, having risen 24% so far in June alone. The rise pushed its market cap to $3.34trn, topping Microsoft's $3.32trn and Apple's $3.29trn.

Nvidia's gains helped push the S&P 500 up 0.25% to a new high of 5,487.03, while the Nasdaq edged just 0.03% higher to a fresh record of 17,862.23. The Dow, meanwhile, rose 0.15% to 38,834.86.

However, gains were limited ahead of the Juneteenth US public holiday on Wednesday, with comments from a number of Federal Reserve policymakers likely also weighing on sentiment.

The head of the Richmond Federal Reserve, Tom Barkin, said it wasn't useful for the central bank to give forward guidance to the markets over interest rates. Barkin acknowledged that May's inflation report was "very encouraging", but said more data is needed before the Fed makes any decisions.

In a separate speech, St Louis Fed president Alberto Musalem said rates should only be cut after "months, and more likely quarters" of falling inflation.

Investors were having to contend with scheduled speeches from six members of the Fed on Tuesday, along with a mixed batch of economic data from May.

US retail sales rose by just 0.1% last month, missing the 0.2% growth expected, while April's change was revised to -0.2% from 0%. Michael Pearce, deputy chief US economist at Oxford Economics, said the figures "leave real consumer spending on track for a gradual slowdown in Q2".

Meanwhile, US industrial production increased by 0.9% last month, following no change in April and beating the 0.3% reading expected.

Market movers

Chip stocks were continuing to outperform, with Nvidia, Micron Technology and Qualcomm all putting in gains.

Micron was being lifted by comments from Bank of America, which added the stock to its US 1 List – the collection of the bank's best investment ideas.

“While everyone is still talking about Nvidia being the superstar stock to own, Micron has been putting up a great fight," said Dan Coatsworth, investment analyst at AJ Bell. "A 133% advance in its share price over the past 12 months might be slightly less than Nvidia’s 204% return over the same period, but it has put Micron on the map of big stock market success stories."

Banks were also in demand, with Bank of America, Wells Fargo, Citigroup and JPMorgan Chase all on the rise.

Meanwhile, electric car stocks like Tesla and Nikola were in reverse after the bankruptcy of Fisker prompted a sell-off across the sector.

Apple was inching lower after the news that the tech giant is ending its buy now, pay later service which it launched in March 2023.

Adobe rebounded slightly following falls on Monday after the software group was accused by Justice Department on Monday of making it too difficult for customers to cancel their subscriptions.

McDonald’s was lower after the fast food giant ended a two-year experiment to use automated order taking at its drive-through stations.

Dow Jones - Risers

Walgreens Boots Alliance, Inc. (WBA) $16.11 6.34%
Goldman Sachs Group Inc. (GS) $457.44 1.61%
Verizon Communications Inc. (VZ) $40.08 1.57%
Home Depot Inc. (HD) $354.29 1.25%
JP Morgan Chase & Co. (JPM) $197.01 1.04%
Visa Inc. (V) $273.62 0.90%
Amgen Inc. (AMGN) $305.99 0.89%
Caterpillar Inc. (CAT) $324.91 0.85%
Procter & Gamble Co. (PG) $168.64 0.63%
International Business Machines Corporation (CDI) (IBM) $170.54 0.62%