NEW YORK: US stocks rose to fresh peaks on Wednesday, as Nvidia became the first company to crack USD5 trillion in market valuation, while investors awaited a likely rate cut from the Federal Reserve and a wave of results from tech heavyweights.
Shares of Nvidia rose 2.2 percent, storming past the milestone, after CEO Jensen Huang announced USD500 billion in AI chip orders and plans to build seven supercomputers for the US government.
The stock has risen more than 50 percent this year, leading the AI rally on Wall Street. Apple and Microsoft topped USD4 trillion in market cap on Tuesday, also on optimism about AI deals.
Results from Meta, Microsoft and Alphabet could make or break the AI trade that has been a primary driver of the record-breaking US stocks rally.
“Investors expect Nvidia and other tech companies to continue to beat earnings estimates, not only for this quarter but for future quarters. This bull market for tech remains very much intact,” said Sam Stovall, chief investment strategist at CFRA Research.
Other than the results, investors are awaiting the US central bank’s monetary policy decision at 2:00 p.m. ET. It is widely expected to cut interest rates by a quarter of a percentage point.
After nearly a month of a US government shutdown that has kept key economic data under wraps, investors will hunt for clues on the Fed’s rate path after leaning on private surveys and corporate announcements to fill the void.
Traders are expecting another 25 basis point rate cut in December and further easing next year.
Investors will also keep an eye on the central bank’s plans to end its “quantitative tightening” policy - a long-running effort to shrink its balance sheet.
At 11:56 a.m., the Dow Jones Industrial Average rose 256.98 points, or 0.54 percent, to 47,963.35, the S&P 500 gained 13.72 points, or 0.20 percent, to 6,904.61 and the Nasdaq Composite gained 123.39 points, or 0.52 percent, to 23,950.88.
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