S&P 500 and Nasdaq surge as investors eye Nvidia earnings report

The Nasdaq and S&P 500 ended Monday on a positive note, bouncing back after losses as investors looked forward to quarterly results from AI giant Nvidia.

Meanwhile, Tesla shares also surged amid hopes for regulatory changes under the incoming Trump administration.

According to Reuters, Nvidia is set to release its third-quarter earnings on Wednesday, with investors focusing on chip demand and whether the AI-driven market rally can continue.

Over the past year, Nvidia contributed to 20% of the S&P 500’s gains and is expected to account for nearly 25% of its earnings growth this quarter, according to BofA Global Research.

However, Nvidia’s shares dropped 1.3% following reports of its new AI chips overheating in servers.

Carol Schleif, Chief Investment Officer at BMO Family Office, noted that while Nvidia is the last of the major tech firms to report earnings, “it will be noteworthy,” however, she added that it might not carry “the same level of impetus around it” as in previous quarters.

Reuters reported that the Dow Jones Industrial Average decreased by 0.13%, or 55.39 points, to close at 43,389.60.

Meanwhile, the S&P 500 rose by 0.39%, or 23.00 points, to 5,893.62, and the Nasdaq Composite Index also rose by 0.60%, or 111.69 points, to finish at 18,791.81.

Energy stocks led the S&P 500 with a 1.05% gain.

In comparison, consumer discretionary stocks rose 1.04%, supported by a 5.6% jump in Tesla shares after a Bloomberg report reported that President-elect Donald Trump’s transition team sought to relax US regulations on self-driving cars.

Meanwhile, industrial stocks saw the largest decline among sectors.

CVS Health’s shares also rose by 5.4% after the company said it would add four new members to its board as part of an agreement with Glenview Capital Management.

According to Ms Schleif, specific sectors could face more volatility until further details about Mr Trump’s cabinet choices are released later this month.

Although Wall Street has seen some setbacks recently, it remains relatively well-placed as the year ends.

Last week, rising expectations that the Federal Reserve may slow its policy easing and uncertainty about Mr Trump’s cabinet picks caused the S&P 500 and Nasdaq to log their worst weekly losses in over two months.

With the holiday shopping season approaching, investors are keeping a close eye on earnings from major retailers such as Walmart, Lowe’s, and Target to gauge the strength of US consumer spending.

On the NYSE, more stocks were rising than falling, with 159 hitting new highs and 88 hitting new lows. On the Nasdaq, 2,158 stocks rose, while 2,150 fell.

The S&P 500 had 29 new highs and 13 new lows, while the Nasdaq had 69 new highs and 265 new lows. US exchanges saw 14.94 billion shares traded, above the 14.12 billion average over the past 20 trading days. /TISG

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