The AI fervor powering the stock market shows no sign of cooling down.
Much as in 2023, investors piled into bets in the first half of this year that the artificial intelligence boom is just getting started. They sent Nvidia shares soaring 150%, propelling the graphics-chip maker’s market value above $3 trillion and briefly making it the most valuable company in the world.
Nvidia’s ascent is a big reason the S&P 500 has climbed 15% this year—nearly as much as in last year’s standout first half—even as a series of hot inflation readings damped investors’ hopes that the Federal Reserve would soon begin to cut interest rates.
Investors entered the year thinking the central bank might lower rates some half-dozen times, giving them a cheery view of the path ahead for stocks. But data in the following months showed price pressures were persisting, and the Fed has held off on rate cuts so far.
That shift helped push bond yields higher, with the yield on the benchmark 10-year U.S. Treasury note climbing to 4.287% on Thursday from 3.860% at the end of last year.
Rising yields tend to weigh on investors’ enthusiasm for taking on the risk inherent in the stock market. But in the first half of 2024, eagerness to own a piece of an AI-charged future won out, pushing the S&P 500 to 31 record closes.
Read more here from the Wall Street Journal.
