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Published 00:21 IST, August 30th 2024

Dow hits record high; Nvidia forecast disappoints

The Commerce Department’s report revealed that the US economy expanded faster than initially projected, driven by robust consumer spending.

Reported by: Business Desk
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Wall street update
Wall street update | Image: Freepik

Dow hits all-time high: Wall Street saw gains across the board on Thursday, with the Dow Jones Industrial Average reaching an all-time high, buoyed by strong US economic data. However, Nvidia, a leading AI chipmaker, faced a setback as its quarterly revenue forecast fell short of investor expectations.

The Commerce Department’s report revealed that the US economy expanded faster than initially projected, driven by robust consumer spending. This data bolstered optimism that the country might sidestep a recession.

Jeffrey Roach, Chief Economist at LPL Financial, noted, “Downward revisions to inflation, coupled with an upward adjustment in spending, reinforce the case for a soft landing.”

Nvidia’s forecast for quarterly revenue, released late Wednesday, failed to impress, causing its stock to drop by 3.2 per cent. Despite this decline, Nvidia’s shares have surged 144 per cent so far in 2024.

AI stocks remain resilient

Interestingly, the dip in Nvidia’s stock did not extend to other AI-focused companies. Microsoft saw a 1.9 per cent increase, while Alphabet (Google's parent company) added nearly 1 per cent. Broadcom and Advanced Micro Devices each gained about 1 per cent.

Terry Sandven, Chief Equity Strategist at US Bank Wealth Management, commented, “It’s too soon to be bearish on AI-related companies. We believe there’s still significant upside potential, as the AI revolution is still in its early stages.”

Apple’s stock rose by 2.5 per cent following Citigroup’s designation of the company as its top AI pick.

The Dow Jones Industrial Average hit a record high, and the S&P 500 was just shy of its July peak, with expectations for a potential interest rate cut in September remaining strong. The S&P 500 was up 0.76 per cent at 5,634.92 points.

The Nasdaq Composite Index rose 0.93 per cent to 17,718.61 points, while the Dow increased by 1.10 per cent to 41,542.10 points.

Of the 11 S&P 500 sector indexes, nine were up, led by energy with a 1.49 per cent gain and industrials with a 1.46 per cent increase.

Jobless claims fall slightly

A report from the Labour Department indicated slightly lower-than-expected jobless claims for the prior week. The upcoming June Personal Consumption Expenditures report, due Friday, may provide insights into future monetary policy adjustments.

CrowdStrike saw a 5.3 per cent increase after surpassing revenue expectations for the quarter, while Dollar General plunged 30 per cent after revising its annual sales and profit forecasts downward.

Advancing stocks outnumbered declining ones on the S&P 500 by a ratio of 4.6-to-1. The S&P 500 recorded 64 new highs and four new lows, while the Nasdaq saw 81 new highs and 76 new lows.

(With Reuters Inputs)

Updated 00:21 IST, August 30th 2024