S&P 500 retreats after briefly topping 5,500 for the first time ever

The S&P 500 and Nasdaq Composite experienced a drop in volume on Thursday, with the broad market index falling 0.3% after briefly reaching the 5,500 level. Nvidia that temporarily unseated Microsoft as the most valuable public company, declined 3.4% after rising earlier in the session.

Shares have climbed more than 160% this year as the AI boom continues to boost equities, despite slowing consumer spending. Darden Restaurants edged up 2% after topping earnings expectations, while Gilead Sciences popped 8% following a successful late-stage trial of its HIV prevention shot.

Excitement around AI has continued to push the market higher in recent weeks, despite concerns over a lack of market breadth outside technology behemoths. Fresh economic data contributed to the argument that the economy is softening, including higher-than-expected weekly jobless claims and poor housing starts and permits. Gilead Sciences headed for its best day since 2022 after its HIV prevention drug succeeded in a late-stage trial, resulting in a nearly 9% increase.

The Nasdaq Composite is at risk of posting a bearish “outside day” on Thursday if it closes below 17,796.88. Giants like NVIDIA, Cadence Design Systems, and Intuitive Surgical hit all-time highs this morning before turning negative. Both NVDA and CDNS are also pacing for outside days as of mid-afternoon trading.

Nvidia has become the largest tech giant, surpassing Microsoft earlier this week. The stock markets of several major world markets are also in the rearview mirror, with Deutsche Bank pointing out that Nvidia’s market cap is bigger than the total value of the stock markets in each of France, Germany, and the UK.

The Dow Jones is gaining momentum as investors return to markets after a midweek holiday. US economic data has cooled, with declining Building Permits and the Philadelphia Fed Manufacturing Survey. Initial Jobless Claims have recovered less than expected, but the Federal Reserve’s hopes of a rate cut are pinned to the ceiling. Rate markets are pricing in a 70% chance of a quarter-point cut on September 18.