Stock market pauses for rest
The stock market on Wall Street saw a calmer trading day, as investors anxiously awaited the US labor market report scheduled for release the following day. Nvidia stocks continued their upswing before traders decided to reap their profits.
U.S. stock markets briefly made it to new record highs again on Thursday, as a result of the robust performance of Nvidia. Yet, these gains were curtailed by profit-taking at Nvidia and unexpectedly weak U.S. job data. Both the tech index Nasdaq and the broad S&P 500 initially rose by about 0.5% each, reaching new heights of 17,235.73 and 5,362.35 points, respectively. However, the Nasdaq soon gave up its advance and finished the day down around 0.1% at 17,173. The S&P mostly held steady at 5,352. The benchmark Dow Jones Index rose 0.2% to 38,886.
Nvidia shares started off strong and attained a new record high of $1,248.80 for the third day in a row before falling 1.1% to $1,210. This led to a drop in the world's leading supplier of AI processors' market value, which had first surpassed the $300 billion mark the previous day. A stock split is scheduled for Friday to make the shares more accessible to traders.
With the world's three largest U.S. stock market values - Microsoft, Apple, and Nvidia - comprising 20% of the market capitalization of all companies in the S&P 500, as per Neil Wilson, chief analyst at brokerage firm Finalto, almost half of the S&P 500's price increase this year can be attributed to Nvidia alone. The potential for larger corrections in these companies could potentially pull the entire market down.
Investors are focusing on the upcoming labor figures as a signal of when the U.S. Federal Reserve might lower interest rates. Analysts anticipate a job increase of 185,000 in the non-agricultural sector in May. The ideal number would be between 100,000 and 150,000, according to asset manager Ben Bennett of the insurer Legal & General, as this would keep hopes alive for a future U.S. interest rate cut. Any significantly higher increase could disappoint them. Lower numbers or job losses could stoke fears of a "hard landing" for the world's largest economy.
Robinhood Markets experienced a 6.5% surge in value on news of their largest-ever acquisition. The online broker aims to bolster its presence in the trading of cryptocurrencies with the acquisition of the popular crypto exchange Bitstamp for $200 million in cash. The recent surge in the cryptocurrency business had brought a record quarterly revenue to Robinhood.
Lululemon Athletica also saw its stock price rise, as the sportswear manufacturer reported higher-than-expected profits in the first quarter thanks to strong growth in China and plans to increase its share repurchase program. The stock saw a 4.8% increase.
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After the stock market briefly reached new record highs due to Nvidia's robust performance, traders on Wall Street engaged in share trading, keeping an eye on Nvidia's share prices, which later fell after profit-taking. This drop affected the Dow Jones Index, one of the key indicators of Wall Street's performance.
As the US labor market report was imminent, investors were closely monitoring share prices, particularly on Wall Street, with the Dow Jones serving as a barometer of market trends. The potential impact of this report on the Federal Reserve's interest rate decision was a significant factor in share trading decisions.
