U.S. stocks opened higher on Friday as shares of Nvidia Corp. marched higher, pushing the Nasdaq Composite into record territory for the first time in more than two years.
What’s happening
-
The Dow Jones Industrial Average
DJIA
gained 88 points, or 0.2%, to 39,155. -
The S&P 500
SPX
rose by 21 points, or 0.4%, to 5,107. -
The Nasdaq Composite
COMP
advanced 81 points, or 0.5%, to 39,178.
On Thursday, the Dow Jones Industrial Average rose 457 points, or 1.18%, to 39,069; the S&P 500 increased 105 points, or 2.11%, to 5,087; and the Nasdaq Composite gained 461 points, or 2.96%, to 16,042.
The S&P 500 registered its 12th record finish of the year, while the Nasdaq Composite finished only 0.1% away from a new record.
Even beleaguered small-caps rose, with the Russell 2000
RUT
rising 1%.
What’s driving markets
Nvidia
NVDA,
continued to set the tone for the broader U.S. stock market on Friday as its shares climbed another 4% out of the gate, adding to its historic 16% rise on Thursday.
The chip maker reported quarterly revenue and a sales outlook that handily beat Wall Street analysts’ expectations after the bell on Wednesday. Its blockbuster earnings helped to lift semiconductor stocks and shares of companies associated with the artificial-intelligence craze around the world.
The company’s advance — it has gained more than 66% since the start of the year, according to FactSet data — has helped push the S&P 500 and Nasdaq-100 to record after record in 2024. Now the Nasdaq Composite, the last of the major U.S. equity indexes to take out its record highs from two years earlier, is on track to finally notch a new record close, according to Dow Jones Market Data.
Nvidia’s surge coincided with the largest increase in market capitalization in the history of corporate America, leaving it as the third most valuable stock in the S&P 500, now ahead of both Alphabet
GOOGL,
and Amazon.com
AMZN,
Investors heeded Nvidia CEO Jensen Huang’s proclamation that AI had “hit the tipping point.”
“We think generative AI will prove to be the growth theme of the decade, and Nvidia’s earnings report demonstrates the current strength of AI infrastructure spending,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.
Federal Reserve governor Lisa Cook, in a speech delivered after the stock market closed on Thursday, said it will take time for AI to affect productivity. “History shows that the journey from invention of general-purpose technologies to innovation to productivity can be long and uneven,” she said. “Although adoption of generative AI is happening at a rapid clip, the full benefit of a technology requires complementary investments as well as changes in corporate structure, management practices and worker training.”
Cook said current monetary policy is restrictive but said she wanted greater confidence that inflation is approaching the Fed’s 2% target before cutting interest rates.
Fed governor Christopher Waller made a similar point in a speech Thursday that also was delivered after the stock market closed. “I still expect it will be appropriate sometime this year to begin easing monetary policy, but the start of policy easing and number of rate cuts will depend on the incoming data,” he said.
The latest earnings reports were mixed. Warner Bros. Discovery
WBD,
shares tumbled in premarket trading after the company posted a wider-than-expected fourth-quarter loss.
Meanwhile, Block’s stock
SQ,
surged Friday after the company reported stronger-than-expected margins and bottom-line growth late Thursday.
Intuitive Machines’ stock
LUNR,
rallied after the company’s Odysseus spacecraft reached the moon and started sending signals back to Earth.
