Nasdaq at all-time high as eye on Nvidia results fuels tech stock rally | 5 key points

The US market seems to be headed towards another strong week, as the major indices performed strongly during the trading session on Monday, May 21. The highlight was the surge seen in Nasdaq Composite index, which registered an all-time high.

Fueled by a rally in tech stocks, Nasdaq peaked to a record of 16,823.23 points, before pairing some of the gains to settle at 16,794.87. This was 108.91 points, or 0.65% higher as compared to the previous close.

The S&P 500, after rising significantly last week, remained in the positive trajectory and ended 4.86 points or 0.09% higher at 5,308.13.

What drove the Nasdaq rally? Here are 5 key points

• The highly anticipated earnings of chipmaker Nvidia, which has recorded explosive growth in recent months, has powered the surge in Nasdaq, analysts said. The company was the index’s main driver on Monday, with its stock gaining by up to 2.9%. By the closing bell, Nvidia pared some of the gains to settle at $947.8, still up 2.5% from the previous closing price.

• The jump in Nvidia’s stocks also powered other chipmakers, with Nasdaq Tech 100 rising 1.3% during the trading session. Similarly, the S&P 500 technology index also rose by 1.32%.

• Nvidia will declare its quarterly earnings on Wednesday. Ahead of the results, three major brokerages on Monday raised the stock’s price target. This was one of the key reasons behind the jump in the company’s shares, analysts pointed out. Apart from Nvidia, its sectoral peer Micron Technology surged by 2.96% after Morgan Stanley revised the company’s stock to "equal-weight" from "underweight."

• Analysts also pointed out that the market remained steady despite cautious comments issued by the US Federal Reserve. Fed officials on Monday said it remains still to be seen whether the rate of inflation is receding. Although this indicated that the rate cut cycle may not be initiated soon, the market did not react adversely to it.

• In the week ahead, the US market indices are expected to grow further as Nvidia is likely to post solid results for the quarter ended March 2024. The company’s stock has nearly doubled in 2024 so far, and the market cap has crossed $2.3 trillion.