Stocks Rise on Nvidia Bullish Call as Yields Dip: Market Closes

(Bloomberg) — A rally in chipmakers pushed stocks to another record, as traders bet the potential for rate cuts from the Federal Reserve will continue to fuel the sector that has driven market gains this year.

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The S&P 500 approached the historic mark of 5,500. Nvidia Corp. surpassed Microsoft Corp. as the world’s most valuable company after one of its bullish analysts projected the chipmaker’s value will reach nearly $5 trillion next year — from about $3.3 trillion. Bonds also rose as traders piled into a $13 billion sale of 20-year Treasury bonds.

Wall Street analyzed mixed economic data that showed U.S. industrial production rose in May, helped by a widespread recovery in industrial production. Separately, retail sales barely rose and previous months were revised lower. A chorus of Fed officials emphasized the need for more evidence of cooling inflation before lowering interest rates.

“By now, the economy could make a soft landing, especially if the Fed is quick to adjust policy as conditions change,” said Jeffrey Roach of LPL Financial.

The S&P 500 hovered near 5,480, heading toward its 31st all-time high of 2024. Nvidia rose 3.5% after Rosenblatt Securities analyst Hans Mosesmann raised his price target on the chipmaker to a high of Wall Street from $200, from $140. 10-year Treasury yields fell six basis points to 4.22%.

Institutional clients of Bank of America Corp. invested in U.S. stocks for the second week in a row, led by technology and social media stocks, strategists including Jill Carey Hall wrote in a note to clients.

Separately, a BofA survey showed that global investors are likely to continue pumping money into record-high stock markets.

Responding to a question about the asset class that would benefit most from a reallocation of money market funds, 32% of respondents chose US equities. Another 19% said the money would go into global stocks, while a quarter of respondents indicated they would buy government bonds.

There isn’t much doubt in the market right now about curbing enthusiasm about the rally in U.S. stocks driven by a small group of technology stocks. But some investors are increasingly looking for ways to hedge concentration risk.

And with each album this concentration increases even more. The so-called Magnificent Seven companies contributed more than 60% to the S&P 500’s returns this year.

The story continues

Corporate Highlights:

• Dollar Tree Inc. continued to sell children’s applesauce contaminated with “extremely high” levels of lead long after the company recalled the product due to contamination concerns, U.S. regulators said.

• filed for bankruptcy on Monday, months after the electric vehicle startup halted production of its only model, the often-defective Ocean SUV.

• A Boeing Co. quality inspector alleged the planemaker mishandled and lost control of hundreds of defective parts, some of which he said may have been installed on new 737 Max planes, the latest revelation from a whistleblower pointing out possible misconduct by the manufacturer.

• Construction company Lennar Corp. reported better-than-expected orders, but its forecast for business in the current quarter came in below analysts’ estimates.

• has halted online sales of its popular Zyn nicotine pouches brand in the US after receiving a subpoena in the District of Columbia related to flavored products that are banned there.

Main events this week:

• UK CPI Wednesday

• Eleventh month holiday in the US, Wednesday

• Preferential lending rates in China, Thursday

• Eurozone consumer confidence, Thursday

• UK BOE Rate Decision Thursday

• US Housing Starts, Initial Jobless Claims, Thursday

• Eurozone S&P Global Manufacturing PMI, S&P Global Services PMI, Friday

• US Existing Home Sales, Conf. Board Leading Index, Friday

• Fed’s Thomas Barkin Speaks on Friday

Some of the main movements in the markets:

Actions

• The S&P 500 was up 0.1% at 3:09 p.m. New York time

• The Nasdaq 100 has changed little

• The Dow Jones Industrial Average has changed little

• The MSCI World index rose 0.3%

Coins

• The Bloomberg Dollar Spot Index fell 0.1%

• The euro was little changed at $1.0738

• The British pound was little changed at $1.2707

• The Japanese yen was little changed at 157.78 per dollar

Cryptocurrencies

• Bitcoin fell 2.9% to $64,436.21

• Ether fell 3.4% to $3,392.19

Titles

• The 10-year Treasury yield fell six basis points to 4.22%

• Germany’s 10-year yield fell two basis points to 2.40%

• Britain’s 10-year yield fell seven basis points to 4.05%

goods

• West Texas Intermediate crude rose 1.4% to $81.49 a barrel

• Spot gold rose 0.4% to $2,329.44 an ounce

This story was produced with help from Bloomberg Automation.

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