Nvidia Soars, Driving Dow Jones Towards 44,200

The Dow Jones Industrial Average continued its upward trajectory on Wednesday, gaining approximately 100 points and inching closer to the 44,200 mark. This bullish momentum appears to be driven more by a lack of negative catalysts than by any significant positive drivers.

The recent campaign trail filled with frequent threats of widespread tariffs has seemingly subsided, although the potential for unexpected tariff announcements on goods from Canada, Mexico, and China remains a possibility. However, investors appear to have become accustomed to these threats and are largely disregarding them.

With a relatively quiet economic data calendar this week, leading up to Friday’s release of the S&P Global Purchasing Managers’ Index (PMI), equities have been drifting higher in the absence of any major economic concerns. While the PMI is expected to show mixed results, with a slight increase in manufacturing activity and a slight decline in services, the impact may be limited due to the historical unreliability of the survey data.

The Federal Reserve has entered its pre-meeting blackout period ahead of next week’s interest rate decision, providing traders with a brief respite from frequent commentary from central bank officials. The Fed is widely expected to maintain interest rates at their current levels for the foreseeable future, reflecting the uncertainty surrounding the potential impact of the new administration’s policies on the economy.

Within the Dow Jones, Nvidia (NVDA) stands out, gaining another 4% on Wednesday, pushing its price towards $147 per share. This surge is likely attributed to the recent announcement of a government investment plan in AI infrastructure, which is expected to significantly benefit companies like Nvidia.

Looking ahead, the Dow Jones appears poised for further gains, having risen in six of the last seven trading sessions. Technical indicators suggest bullish momentum, with the Moving Average Convergence-Divergence (MACD) signal lines continuing to rotate higher. However, a break above the 44,000 level will be crucial to solidify the upward trend.