NEW YORK (AP) — U.S. stock indexes rose on Thursday, driven by a surge in chip stocks, as Nvidia reached new highs amid renewed excitement over artificial intelligence (AI).
Market Performance Overview
The Dow Jones Industrial Average increased by nearly 200 points, with the S&P 500 and Nasdaq Composite also showing gains. Nvidia led the charge, climbing 3% to a record high after CEO Jensen Huang unveiled new AI products at the CES tech conference.
Index Highlights
S&P 500: 5,989.62, up 0.25%
Dow Jones Industrial Average: 42,906.03, up 0.44% (+186.70 points)
Nasdaq Composite: 19,889.67, up 0.10%
Nvidia’s Keynote Sparks AI Enthusiasm
Nvidia’s stock flirted with record highs, driven by CEO Jensen Huang's keynote at CES, where he introduced a range of new AI initiatives. These included advancements in robotics, autonomous vehicles, and agentic AI, reigniting investor enthusiasm in the sector.
Huang's announcements provided a much-needed catalyst for tech stocks, particularly in the lead-up to the earnings season. The keynote also emphasized Nvidia's strategic partnerships, such as with Micron Technology, which is supplying memory for Nvidia’s latest AI-powered gaming chips.
Broader Market Reactions
Micron Technology’s shares rose by 6% following the keynote, contributing to a broader rally in chip stocks. Foxconn’s positive earnings report further boosted the sector.
However, not all sectors shared in the gains. Rate-sensitive stocks like utilities and real estate faced headwinds due to rising Treasury yields. The 10-year Treasury yield climbed two basis points to 4.642%, exerting pressure on these sectors.
Upcoming Economic Data
Investors are closely watching for new economic data. The Job Openings and Labor Turnover Survey is expected on Tuesday, followed by ADP’s private payroll data on Wednesday, and the December nonfarm payrolls report on Friday. Analysts anticipate the report will show an addition of 155,000 jobs and an unchanged unemployment rate of 4.2%.
Commodities and Crypto Update
West Texas Intermediate Crude: Up 0.9% to $74.23 per barrel.
Brent Crude: Increased by 1% to $77.04 per barrel.
Gold: Rose by 1% to $2,676.50 per ounce.
Bitcoin: Nearly flat at $100,438.
Nvidia’s Stock Performance and Future Outlook
Despite an initial rise, Nvidia’s stock fell by 5.3% to $141.62 in morning trading after unveiling its new AI products. Investors expressed disappointment over the lack of updates on its next-generation AI chips, notably the Blackwell processors.
Benchmark analyst Cody Acree highlighted investor expectations for more concrete progress on Nvidia’s AI chip developments, which were only briefly mentioned during Huang's speech.
Nevertheless, Nvidia's new GeForce RTX 50 Blackwell gaming cards and its partnerships in autonomous technology and robotics indicate significant growth potential. Wedbush analyst Daniel Ives projected that Nvidia could reach a $5 trillion market cap within 12 to 18 months, citing the $1 trillion opportunity in robotics and autonomous technology markets.
Conclusion
Nvidia’s latest AI initiatives have reignited market enthusiasm, driving gains across major indexes. While the chipmaker’s stock faced a pullback due to unmet investor expectations on AI chip advancements, its diversified growth strategy in gaming, robotics, and autonomous technology positions it for substantial future gains. As the market anticipates key economic data later this week, Nvidia’s performance underscores the continued investor interest in AI and its transformative potential across industries.
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