Nvidia surge leads Megacap gains as US Indexes close higher

Following an optimistic note from Morgan Stanley, shares of chipmaker Nvidia rose, helping the S&P 500 and Nasdaq close higher. As investors awaited the earnings results from US retailers, this caused other Megacap growth stocks to increase.

The information technology index increased thanks to Nvidia’s gain, making it the strongest of the 11 S&P 500 sector indices. Alphabet, Amazon.com, and chipmaker Micron Technology were among the other Megacap growth firms to report advances.

The Nasdaq Composite increased 143.81 points, or 1.05%, to 13,788.66, while the S&P 500 increased 26.28 points, or 0.59%, to close at 4,490.33 points. To reach 35,311.78, the Dow Jones Industrial Average increased by 30.38 points, or 0.09%.

Due to the significant shift in expenditure towards artificial intelligence (AI) and an unprecedented supply-demand imbalance that should last for the upcoming quarters, Morgan Stanley analysts said Nvidia remains their top choice. Due to hotter-than-expected US producer pricing data, which stoked worries that the Federal Reserve would keep US interest rates higher for longer, the Nasdaq and S&P 500 declined last week.

After the electric car manufacturer said it had lowered pricing in China for some Model Y models, Tesla defied the rising trend and dropped. This week, the market will be focused on the quarterly results of significant American retailers like Walmart and Target. Retail sales data for July is anticipated economic data that may influence perceptions of how US interest rates will develop.

There is a nearly 89% chance that the Fed will leave interest rates steady next month. The Fed should start lowering the funds rate in the second quarter of 2024, according to Goldman Sachs’ most recent report.