Stocks rose on Tuesday as the Federal Reserve began its two-day policy meeting, with traders closely watching tech giant Nvidia following key announcements. The Dow Jones Industrial Average gained 266 points, the S&P 500 climbed 0.3%, and the Nasdaq Composite advanced 0.1%. Treasury yields dipped, boosting stocks, amid concerns over inflation reports and interest rate signals from the central bank. Nvidia’s CEO unveiled a new AI chip, Blackwell, leading to a 0.6% increase in the company’s stock.
Super Micro Computer, a primary vendor for Nvidia’s AI servers, saw a more than 9.5% drop on news of a share offering. Meanwhile, bitcoin proxy MicroStrategy dropped over 8% as the recent bull run in the market showed signs of slowing down. Chief investment strategist Sam Stovall noted that the AI revolution still has room to grow and that the current decline in the market is likely a temporary correction after recent gains, with traders possibly taking profits in response to uncertainties.
Stovall emphasized that a “healthy” market digestion could occur later or be deeper than expected by investors. He believes that the decline is just a minor adjustment in light of the ongoing AI revolution, and traders may be reacting to known factors rather than underlying market fundamentals. Overall, market dynamics remain uncertain as investors navigate through evolving economic conditions and technological advancements.
