S&P 500 ends higher, lifted by Nvidia and other AI stocks
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Traders working on the floor of the New York Stock Exchange, in New York City, on Feb 18.
PHOTO: REUTERS
- The S&P 500 and Nasdaq rose on Feb 18, led by tech giants like Nvidia and Amazon, recovering from earlier AI-related valuation jitters.
- Nvidia surged after signing a multi-year deal with Meta to supply AI chips, while Palo Alto Networks dropped after cutting its profit forecast.
- Fed officials held interest rates in January; traders now see a 50 per cent chance of a June rate cut amid solid US economic growth.
AI generated
NEW YORK - The S&P 500 ended higher on Feb 18, lifted by gains in Nvidia, Amazon and other technology-related heavyweights following recent jitters about artificial intelligence.
Nvidia climbed after the world’s most valuable company said it had signed a multi-year deal to sell to Meta Platforms millions of its current and future AI chips.
Sandisk, Western Digital and Seagate Technology Holdings climbed for much of the session, adding to strong gains in recent months fueled by massive AI-related demand for their storage technology.
AI-related stocks lost ground earlier this month as investors worried about high valuations and how long it might take for AI investments to boost revenue growth.
Amazon and Microsoft rose on Feb 18.
“At a certain point, weakness in tech was bound to bring in the marginal buyer. These are still high-growth names. They were expensive and they’ve gotten cheaper,” said Mr Ross Mayfield, an investment strategy analyst at Baird in Louisville, Kentucky.
“There are still a lot of people who want to be exposed to tech for the next several years.”
Software makers also showed signs of recovery following recent worries that improved AI tools could lead to more competition and squeeze their profit margins.
The S&P 500 software and services sector increased after tumbling earlier this month. It was helped by advancing Cadence Design Systems shares, after the chip-design software provider beat fourth-quarter revenue estimates.
Palo Alto Networks dropped after trimming its annual profit forecast.
According to preliminary data, the S&P 500 gained 37.05 points, or 0.56 per cent, to end at 6,880.27 points, while the Nasdaq Composite gained 170.88 points, or 0.76 per cent, to 22,749.27.
The Dow Jones Industrial Average rose 123.44 points, or 0.25 per cent, to 49,656.63.
Federal Reserve officials were in nearly unanimous agreement to keep interest rates on hold at their meeting in January, but remained split over what might happen next, according to minutes of their Jan 27-28 meeting released on Feb 18.
Traders are pricing in a roughly 50 per cent chance of a rate cut of at least 25 basis points by the Fed’s June meeting, according to CME’s FedWatch Tool.
Data released on Feb 18 showed solid business spending and US economic growth in the fourth quarter.
Analog Devices rose after the chipmaker forecast second-quarter results above Wall Street estimates.
Global Payments jumped after the payment technology firm projected annual adjusted profit above expectations.
Moderna climbed after the US Food and Drug Administration agreed to review its influenza vaccine, reversing an earlier decision rejecting the application. REUTERS
