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A person looks at the NVIDIA Grace Hopper superchip at the Gigabyte booth at COMPUTEX 2023 in Taipei.
new york
CNN
—
U.S. stocks soared Thursday morning as a strong earnings report from tech giant Nvidia boosted optimism among Wall Street investors.
The blue-chip Dow Jones Industrial Average rose 246 points, or 0.6%. The S&P 500 index rose 1.3%, and the tech-heavy Nasdaq Composite Index rose 2%.
Wall Street’s biggest company, Nvidia, led the rally, reporting extraordinary profit growth, fueled by the artificial intelligence boom.
The company’s profits rose to nearly $12.3 billion in the three months ended Jan. 28, up from $1.4 billion in the year-ago period and up 769% year-over-year and further than Wall Street analysts expected. This resulted in strong growth. As a result, the company’s full-year profit increased by more than 580% compared to the previous year.
Nvidia CEO Jensen Huang said on an earnings call Wednesday night that generative AI is “reaching a tipping point.”
The company’s shares rose 12.6% in morning trading, reversing from earlier in the week when the company had its worst day since October.
Other chipmakers also benefited from Nvidia’s good news. As of Thursday morning, AMD stock was up 5.4% and Microsoft was up 1.7%. Meanwhile, Intel rose 0.6%.
A surge in Big Tech means the Nasdaq could hit another all-time high this week.
Nvidia’s support has put the Federal Reserve’s concerns on the back burner for now, but traders learned some disappointing news on Wednesday.
Fed officials remain concerned that inflation could remain high during last month’s policy meeting, according to minutes released yesterday afternoon. That could keep interest rates at 23-year highs for longer than previously expected, impacting the cost of borrowing for Americans on everything from car loans to home mortgages.
According to the CME FedWatch tool, most traders now believe the Fed will start cutting rates in June or July, rather than at its May policy meeting.
This story is in development and will be updated.