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Saturday, July 13, 2024

Nasdaq streak of records ends as Nvidia falls

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The Nasdaq fell Thursday, ending a streak of seven straight record closes following a drop in AI chip giant Nvidia and other artificial intelligence equities that have so far led the market this year.

“When a handful of stocks are pulling the market higher, what happens when those stocks go down?” asked Steve Sosnick of Interactive Brokers. “It makes things very fragile when they stop.”

But “there is no reason to panic,” Sosnick added.

The tech-rich Nasdaq Composite Index finished down 0.8 percent at 17,721.59.

The broad-based S&P 500, which has also scored multiple records in recent weeks, declined 0.3 percent to 5,473.17, while the Dow Jones Industrial Average climbed 0.8 percent to 39,134.76.

The blue-chip index has underperformed the other two indices in recent weeks.

The surge in Nvidia and other chip companies, along with tech giants like Apple and Microsoft that are players in AI, has lifted stocks in 2024, offsetting disappointment at the Federal Reserve’s delaying of interest rate cuts.

Even with Thursday’s 3.5 percent drop, Nvidia is still up nearly 20 percent in June alone.

“It’s extraordinarily unusual for a stock to have a run like it has,” Sosnick said on Nvidia.

Among other companies, Honeywell advanced 0.6 percent after announcing it will buy defense technology company CAES Systems Holdings LLC from private equity firm Advent International for about $1.9 billion.

Gilead Sciences soared 8.5 percent after announcing successful trial results for an injectable HIV prevention treatment.

Darden Restaurants, parent company of Olive Garden and other chains, climbed 1.5 percent after reporting higher quarterly sales as the company boosted its dividend.

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