The Nasdaq hit an all-time record on Tuesday afternoon, after breaching the symbolically important 17,000 level for the first time, buoyed as AI darling Nvidia also jumped to a record high.
Nvidia’s gains – of nearly 6pc today – lifted its fellow chip stocks. The Philadelphia Semiconductor Index of 30 leading US chip companies rose 1.8pc after traders returned from a holiday weekend.
The rise in AI stocks came even as focus shifted to key inflation data later in the week that could sway expectations for the Federal Reserve’s plans for interest rates.
The possibility that the world’s most influential central bank could kick off rate cuts this year has sent Wall Street on a record-breaking rally since late 2023, with the Nasdaq and S&P 500 marking their fifth straight week of gains on Friday.
However, expectations for the timing of rate cuts have see-sawed, with policymakers wary as the data still reflects sticky inflation.
Market attention is on the US core Personal Consumption Expenditures Price Index report for April, which will be released later in the week. The Fed’s preferred inflation barometer is expected to hold steady on a monthly basis.
Peter Andersen, founder of Andersen Capital Management, said: “There has been an emerging acceptance by the investment community that it is unlikely that the Fed will lower rates in 2024.
“As we anticipate the next economic data, investors will be looking to see if those results will reinforce the changing opinion that there will be no rate cuts this year.”
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