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US stocks soar; Nvidia’s strong outlook drives tech rally


US stocks soar; Nvidia’s strong outlook drives tech rally By

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AuthorPeter NurseStock Markets

Published Feb 21, 2024 23:54
Updated Feb 22, 2024 14:42

© Reuters– U.S. stocks rose strongly Thursday, with a blockbuster earnings report from AI darling Nvidia boosting sentiment, particularly in the tech sector.

By 09:35 ET (14:35 GMT), the Dow Jones Industrial Average was up 240 points, or 0.6%, S&P 500 traded 65 points, or 1.3%, higher and Nasdaq Composite climbed 315 points, or 2%.

Nvidia surges on strong Q4 results, outlook  

Nvidia (NASDAQ:NVDA) stock jumped over 12% Thursday, climbing to within sight of record highs hit earlier in February, after the world’s most valuable chipmaker reported stronger-than-expected fourth quarter earnings, and forecast first quarter revenue at about $24 billion, more than what analysts were expecting. 

The strong earnings and outlook signaled that the firm expected to continue reaping the benefits of increased demand for AI development, given that it is a key producer of chips geared specifically towards the large-language models which surged in popularity through 2023. 

Nvidia’s gains spilled over into other major tech stocks, given that investors expect AI demand to also boost the broader tech sector in the coming months. Alphabet (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT) and Meta Platforms (NASDAQ:META) all posted healthy gains, with all three having AI products in the pipeline. 

Similarly, major chipmaking stocks, such as TSMC (NYSE:TSM) Micron Technology (NASDAQ:MU) and Intel (NASDAQ:INTC), which are expected to benefit from increased AI demand, also traded higher.  

Additionally, the likes of Palantir Technologies (NYSE:PLTR), Advanced Micro Devices (NASDAQ:AMD) and Super Micro Computer (NASDAQ:SMCI) powered ahead in Nvidia’s slipstream. 

Corporate earnings continue

There are more quarterly results to digest Thursday, with Moderna (NASDAQ:MRNA) reporting a surprise fourth-quarter profit helped by cost cutting and some deferred payments, while Live Nation Entertainment (NYSE:LYV) and Intuit (NASDAQ:INTU) are scheduled for after the close. 

Additionally, Etsy (NASDAQ:ETSY) slumped 8% after the e-commerce firm reported mixed earnings and guidance, while electric vehicle manufacturer Rivian Automotive (NASDAQ:RIVN) fell 22% after it forecast a disappointing production figure for 2024.

Royal Caribbean (NYSE:RCL) stock rose 6% after the cruise operator raised its full-year income forecast, saying it has been encouraged by both the “demand and pricing environment” in 2024.

Wayfair (NYSE:W) stock gained 7% after the online furniture retailer reported a narrower-than-expected fourth-quarter loss and said it returned to positive active customer growth.

PMI data to provide economic update 

Data released earlier Thursday showed that the number of Americans filing new claims for unemployment benefits unexpectedly fell last week, suggesting that job growth likely remained solid in February.

This added to a sense of wariness over future monetary policy, which followed the Fed minutes, released on Wednesday, largely reiterating the central bank’s stance on keeping interest rates elevated in the near-term.

The focus later in the session will likely be on the manufacturing and services PMI data for February, which will provide a more up to date gauge of the health of the U.S. economy.  .

Crude retreats after large inventories build

Oil prices retreated Thursday, after another hefty build in U.S. inventories overtook concerns over tightening global supplies due to disruptions in the Middle East. 

By 09:35 ET, the U.S. crude futures traded 0.7% lower at $77.37 a barrel, while the Brent contract dropped 0.7% to $82.46 a barrel. 

Data from the American Petroleum Institute showed U.S. inventories grew by 7.2 million barrels in the week to February 16, much more than expectations for a build of 4.3 million barrels. 

While the build was smaller than the 8.5 million barrel build reported by the API for the prior week, it was a third straight week of builds in U.S. inventories, and signaled that the world’s largest fuel consumer remained well supplied.

Official numbers from the Energy Information Administration are due later in the session.

Additionally, gold futures rose 0.1% to $2,034.95/oz, while EUR/USD traded 0.1% lower at 1.0813.

(Ambar Warrick contributed to this article.)

US stocks soar; Nvidia’s strong outlook drives tech rally

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