Nvidia’s stock reached a historic milestone on Wednesday, becoming the most valuable company in the world with a market cap of $3.58 trillion, surpassing Apple at $3.38 trillion. Nvidia’s shares surged by as much as 5% to hit a record intraday high of $146.47, propelled by a broader tech rally following Donald Trump’s presidential election victory. The Nasdaq 100 rose nearly 3%, further highlighting the positive impact of pro-business policies expected under the new administration, which investors believe could accelerate growth within the tech sector.
This achievement marks the first time Nvidia has topped the list of the world’s most valuable companies since late October. Over the past two years, Nvidia’s success has been largely driven by its role as a leading supplier of AI-enabling GPU chips, which are integral to the artificial intelligence sector. Nvidia’s stock has risen over 800% since the release of ChatGPT, a testament to its importance in the AI ecosystem. This growth has added nearly $3.2 trillion to its market cap, solidifying its leadership in an industry that many believe is just beginning to reach its potential.
Analysts are optimistic about Nvidia’s continued growth, with several expecting its market valuation to surpass $4 trillion in the near future. Last week, Bank of America raised its price target for Nvidia to $190, describing the company as a "generational opportunity" in the AI market. On Friday, Nvidia is set to replace Intel in the Dow Jones Industrial Average, a symbolic milestone further validating Nvidia’s dominance.
Wall Street Ticks Higher as Investors Await Fed’s Interest Rate Decision
On Thursday, the U.S. stock market saw modest gains as investors awaited the Federal Reserve’s decision on interest rates, scheduled for later in the day. The S&P 500 rose 0.5%, while the Dow Jones added 30 points, and the Nasdaq was up 1.1%. This slight uptick follows Wednesday’s significant rally sparked by Donald Trump’s election win. Trump’s pro-business platform, which includes lower taxes and reduced regulation, has fueled optimism among investors who anticipate a stronger economy under the new administration.
Banks, tech, and other sectors that benefit from deregulation and lower taxes experienced gains, although some of the momentum began to slow on Thursday morning. For example, JPMorgan Chase saw a slight decrease of 3.3% as bank stocks took a breather after their strong performance following Trump’s win. Smaller U.S. stocks, which benefit more from a domestically focused economy, saw the Russell 2000 index edge down by 0.1%.
In the bond market, the yield on the 10-year Treasury note eased to 4.36% from 4.44% after Wednesday’s rally. Analysts point out that Trump’s plans for tariffs, reduced taxes, and lighter regulations could lead to both economic growth and inflation. The Fed’s response is widely expected to be a rate cut of a quarter-point to support continued economic growth without triggering inflation.
Global Markets React to U.S. Election and Economic Data
Global markets have responded cautiously to the U.S. election results and economic data. In Asia, Japan’s Nikkei 225 fell by 0.3%, influenced by concerns that Trump’s trade policies could revive tensions with China. Trump has promised to impose blanket tariffs of 60% on Chinese imports, raising concerns among Japanese manufacturers about potential disruptions in supply chains and export markets. However, Chinese markets performed well, with Hong Kong’s Hang Seng index and Shanghai’s index both rising by over 2% after China reported strong export growth in October.
Analysts predict that despite the potential for U.S.-China trade tensions, Chinese exports may remain stable through the first half of next year. According to Zichun Huang from Capital Economics, potential tariffs are unlikely to impact Chinese shipments significantly until late 2025.
Nvidia and Fed Decision Shape Market’s Future
Nvidia’s historic rise and the Fed’s anticipated interest rate decision reflect the U.S. market’s adaptability in a time of shifting political and economic policies. Nvidia’s record-breaking valuation, bolstered by the AI boom, positions it as a crucial player in a rapidly growing industry. Meanwhile, Wall Street’s anticipation of further rate cuts indicates investor confidence in continued economic growth, even amid potential inflationary pressures from the Trump administration's proposed policies.
In the short term, these developments are set to impact both the domestic and international financial landscapes. A favorable Fed decision, coupled with Nvidia's momentum, could potentially push the market higher. In the longer term, the stability of these gains will largely depend on how well the market adapts to evolving fiscal policies and global trade relations under the new U.S. administration. Overall, Nvidia’s growth and investor expectations of a rate cut highlight the current resilience of the U.S. market amid political transitions and economic policy shifts.
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