Overall, the US stock market indices ended higher on Monday, with the S&P 500 and Nasdaq leading the way thanks to gains in technology stocks. These stocks had their best days in two weeks, driven by the rally in chipmaker Nvidia shares. The Dow Jones Industrial Average also finished slightly higher.
The S&P 500 and Nasdaq both saw substantial gains on Monday, driven by strong performances in technology stocks. The S&P 500 rallied 0.58% to close at 4,489.72 points, while the Nasdaq jumped 1.05% to 13,788.33 points. This positive growth was largely fueled by the surge in chipmaker Nvidia shares, which registered its biggest single-day gain since May 25. As a result, the information technology index rose 1.85% higher, boosting the overall performance of the S&P 500 and Nasdaq.
One of the primary drivers behind the rally in technology stocks was chipmaker Nvidia. The company’s shares surged after a bullish note from Morgan Stanley, causing its stock price to rise by 7.1%. This marked the biggest single-day gain for Nvidia since May 25, when it had jumped 24%. The positive note from Morgan Stanley cited a massive shift in spending towards artificial intelligence (AI) and a supply-demand imbalance that is likely to persist for several quarters. These factors contributed to Nvidia being named the top pick by Morgan Stanley analysts.
The bullish note from Morgan Stanley analysts highlighted the significant potential for Nvidia in the AI market. They pointed to a massive shift in spending towards AI and a supply-demand imbalance, which they believe will persist for the next several quarters. This positive assessment solidified Nvidia’s position as the top pick among analysts. The growing adoption of AI across various industries has positioned Nvidia as a key player in this technology, making it an attractive investment opportunity.
The rally in Nvidia shares had a positive ripple effect on other megacap growth stocks. Alphabet, the parent company of Google, saw its shares gain 1.4%, while Amazon.com stock was up by 1.6%. Chipmaker Micron Technology also experienced a rally, with its stock price surging by 6.1%. The performance of these companies further contributed to the overall growth of the information technology index, driving the S&P 500 and Nasdaq higher.
While many technology stocks experienced gains on Monday, Tesla saw a decline in its share price, dropping by 1.2%. The electric vehicle company announced that it had cut prices in China for some Model Y versions, which may have influenced the stock’s performance. On the other hand, Hawaiian Electric Industries saw a steep decline in its share price, tanking almost 34%. The utility company faced increased scrutiny over whether its equipment played a role in deadly wildfires in a Maui town, Lahaina. These contrasting performances highlight the mixed dynamics within the stock market.
Overall, the US stock market indices ended higher on Monday, fueled by gains in technology stocks. The S&P 500 and Nasdaq saw significant rallies, led by chipmaker Nvidia shares. These gains were buoyed by a bullish note from Morgan Stanley, which named Nvidia as its top pick for the AI spending shift. Other megacap growth stocks, such as Alphabet and Amazon.com, also saw positive growth. However, Tesla experienced a drop in its share price, while Hawaiian Electric Industries slumped amid increased scrutiny. Investors will now turn their attention to the quarterly earnings of major retailers and retail sales data for July.
Analyst comment
Positive news for the market: The S&P 500 and Nasdaq rallied on strong performance by technology stocks, notably chipmaker Nvidia. A bullish note from Morgan Stanley named Nvidia as the top pick for the AI spending shift, boosting investor confidence. Other megacap growth stocks also benefited. However, Tesla’s share price dropped and Hawaiian Electric Industries slumped due to specific factors. Investors will closely watch major retailers’ earnings and retail sales data for July.
