Nasdaq Index, Dow Jones, S&P 500 News: Nvidia’s Stock Surge Fuels Optimism for Broad-Based Indices

Market Momentum Shifts as Tech Giants Lead

Stock futures presented a mixed picture Wednesday morning, following a rebound in the S&P 500 and Nasdaq Composite from their three-day decline. The Dow Jones Industrial Average, however, lagged behind its counterparts, sliding nearly 300 points in Tuesday’s regular trading session.

At 12:08 GMT, Dow futures are trading 39436.00, down 90.00 or -0.23%. S&P 500 Index futures are at 5535.75, down 1.25 or -0.02% and Nasdaq futures are trading 19995.25, up 23.00 or +0.12%.

Nvidia’s Relentless Rally

Nvidia continues to dominate market discussions, with its stock rising over 2% in premarket trading after a 7% gain on Tuesday. The AI giant’s influence on the cap-weighted S&P 500 remains substantial, fueled by its 154% surge in 2024. Citi has raised its price target on Nvidia, forecasting a 19% upside potential, citing increased earnings expectations and growing AI adoption. EMJ Capital’s Eric Jackson predicts an even more bullish scenario, projecting Nvidia’s market cap to reach $6 trillion by year-end.

Corporate Developments Spark Interest

Corporate news has also captured traders’ attention. FedEx surged 14% after beating fourth-quarter earnings estimates, while Rivian Automotive soared 40% following news of a potential $5 billion investment from Volkswagen. Shopify received a boost as Citi added it to its “focus list,” highlighting the company’s favorable AI positioning and growth prospects.

Market Breadth Concerns Persist

The concentrated gains in tech giants like Nvidia have raised concerns about market breadth. However, some analysts argue it’s too early to disregard other sectors, anticipating a broader market rally in the future. Traders are advised to look beyond megacaps for potential opportunities in the wider S&P 500.

Economic Data in Focus

Investors are now turning their attention to Friday’s release of the personal consumption expenditures (PCE) price index for May. This key inflation metric could significantly influence the Federal Reserve’s future rate decisions, with market participants remaining hopeful for potential rate cuts.

Market Forecast

The short-term market outlook remains cautiously bullish. While tech leaders continue to drive gains, there’s potential for improved market breadth. Traders should closely monitor the upcoming PCE data for insights into the Fed’s next moves. The possibility of rate cuts later in the year could further support equity markets, but volatility may persist as the market seeks balance between megacap tech performance and broader sector participation.

Technical Analysis

E-mini S&P 500 Index futures are edging higher on Wednesday as traders attempt to clawback the recent 3-day loss.

The short-term range is 5588.00 to 5510.25. Its pivot at 5549.25 was tested earlier in the session. It is likely to control the direction of the benchmark index today.

A sustained move over 5549.25 will indicate the presence of buyers. This could create the upside momentum to challenge a new record high.

A failure to hold 5549.25 will signal the presence of sellers. This could trigger a breakdown to 5510.25, which is the trigger for an acceleration to 5396.75.