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  • Marijan Hassan - Tech Journalist

US stock markets close at record highs as AI fever continues to rise

On Friday last week, US stock markets soared to unprecedented levels, largely due to investors' high optimism around artificial intelligence (AI) technologies.

The S&P 500 and the Nasdaq, particularly driven by gains in Meta and Nvidia, shattered previous records, signalling a significant surge in investor confidence.

Nvidia, a prominent AI chipmaker, also witnessed a historic milestone as its market value exceeded $2 trillion for the first time. The company’s market value has doubled in nine months.

Still on that note, fellow chipmaker, AMD also reached a record high, and the broader Philadelphia semiconductor index set a new record.

The market's bullish trajectory, now marking four consecutive months of gains, is predominantly fueled by the promising growth prospects associated with AI advancements.

Despite lingering concerns about inflation, investors are optimistic about the Federal Reserve's ability to navigate interest rate adjustments smoothly, with June being the anticipated timeline for the first rate cut.

Sam Stovall, Chief Investment Strategist at CFRA Research, noted the Fed's cautious approach to rate cuts, emphasizing the importance of a gradual transition from a high-interest rate environment.

“Because the economy is doing well and because inflation remains a bit sticky, the Fed will be slower to lower interest rates,” said Stovall.

“But that’s good because then we’re gradually coming off of the higher interest rate cycle and we’re not in need of cutting rates aggressively.”

Preliminary data reveals significant gains across major indices: the S&P 500 surged by 0.81% to close at 5,137.43 points, the Nasdaq Composite rose by 1.14% to 16,272.22, and the Dow Jones Industrial Average climbed by 0.24% to 39,088.11 points.


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