4.10pm: Record-breaking day for US stocks
US stocks jumped to new all-time highs on Wednesday, driven by Jerome Powell's comments boosting hopes for rate cuts and gains in Big Tech stocks.
The S&P 500 surpassed the 5,600 mark for the first time to close at a record high of 5,634 points for a 1% gain on the day. The Dow Jones gained 1.1% to finish at 39,721 and the Nasdaq also ended 1.2% higher at 18,647.
Major tech companies like Nvidia, Apple, Microsoft, and Google led the market rally.
Elsewhere, Fed chair Jerome Powell's semiannual testimony to Congress suggested that the Fed might lower interest rates soon, as inflation cools and the labor market stabilizes.
Investors are now awaiting the upcoming consumer inflation report, which could further influence the Fed's policy decisions.
12.10pm: Stocks moving on up
Stocks have taken a leg higher as the clock move from morning into afternoon.
The Nasdaq Composite is now up 0.7%, setting a new intraday high above 18,560, while the S&P 500 is up 0.55% and the Dow Jones 0.47%.
Nvidia, see below, is doing more heavy lifting, but other tech giants are in on the act.
Apple Inc (NASDAQ:AAPL, ETR:APC), which breached a $3.5 trillion valuation yesterday, is up another 1.5% today. Roll on $4 trillion.
Meta Platforms and ASML are others notable 1%-plus gainers.
11.40am: 'This isn’t a tech rally, this is an Nvidia rally'
There are several themes driving markets right now, says Kathleen Brooks, research director at XTB, but Nvidia is doing some serious heavy lifting for US stocks.
"The S&P 500 is having its longest winning streak since November; however, the gains are highly concentrated," she notes, with the headline index outperforming the equal-weighted S&P 500 by 10%, which is the widest margin since the 1990s.
Added to this, the Dow Jones is also underperforming the S&P 500, and the divergence between the two indices has widened significantly since June.
"The sectors powering the S&P 500 to fresh record highs are semiconductors and semiconductor parts, which are massively outperforming other sectors," Brooks notes, with the semiconductor index up 87% in 2024, compared with a 30% gain for the broadline retail index.
As Nvidia is also massively outperforming the other 'Magnificent 7' tech stocks, she says, "this isn’t a tech rally, this is an Nvidia rally".
Today, Nvidia’s is up more than 1.7%, approaching the record high from June 18 after nearly a 10% rise this week, despite not having announced earnings or any new product developments.
"Some argue that the surge in Nvidia’s share price is part of the FOMO trend, the fear of missing out. The rise of ETF investing could also be fueling the AI boom, as passive investing favours large and liquid growth stocks, rather than value investing, which is leading to a positive price shock for the biggest growth companies like Nvidia," says Brooks.
She adds that the rise in Nvidia’s share price this week "suggests that the biggest tech stocks are immune to political instability in the US and around the world", with a slowing but positive growth outlook for the US economy, the prospect of rate cuts in September and not boosting the broader market, which she says, "suggests that the tech giants are a bigger driving force for financial markets right now, even more so than the Fed".
"The key drivers of the S&P 500 are earnings revisions and momentum. Nvidia has seen earnings upgrades in the past month, and has a history of beating earnings forecasts, thus as we embark on the start of earnings season, Nvidia is in focus."
10.30am: Wall Street opens higher, led by Nasdaq
Wall Street stocks opened higher on Wednesday, though with smaller gains than seen in Europe.
The Nasdaq led the US charge, with the composite index up 0.4% to 18,501, hitting a new all-time high of 18,551 in the first hour.
Meanwhile, the S&P 500 was up 0.24%, with both indices helped by advances for some of the tech megacaps, Apple, Nvidia and Microsoft, with Amazon and Tesla stock both falling.
8.30am: Nasdaq to start higher
The Nasdaq 100 is tipped to open up to 80 points higher when markets open this Wednesday, supported in no small part by Tesla Inc (NASDAQ:TSLA)’s bullish ongoing performance.
Elon Musk’s electric vehicle giant is up more than 50% month on month, with another 0.3% of gains expected in today’s opening exchanges.
Though Tesla approached 15-month lows in April, positive sentiment has returned to the group, driven by a strong second-quarter delivery report and hype over an upcoming robotaxi event scheduled for 8 August.
Futures contracts for the broader S&P 500 index have it opening 15 points higher this Wednesday.
Apple Inc (NASDAQ:AAPL, ETR:APC) is another, having topped a $3.5 trillion valuation yesterday and set for more today, based on pre-market moves.