The S&P 500 and Nasdaq closed at record highs on Tuesday as Nvidia extended its surge to new peaks, while the Dow was barely changed following softer-than-expected U.S. retail sales data. Canada’s main stock index ended a three-day losing streak, as higher commodity prices boosted resource shares.
Nvidia overtook Microsoft to become the world’s most valuable company, ending the day with a market capitalization of US$3.22 trillion.
Other chip stocks also extended their recent rallies, boosting the Philadelphia SE Semiconductor index to a record high.
Qualcomm, Arm Holdings and Micron advanced between 2.1% and 8.7%, with Micron hitting a record high.
“It’s really the AI story,” said Ty Draper, financial advisor at Beacon Capital Management in Franklin, Tennessee.
The Nasdaq notched a seventh record closing high in a row, as gains in many chip stocks offset losses in Alphabet, Amazon and Meta Platforms.
U.S. retail sales rose 0.1% in May, versus the 0.3% growth forecast by economists polled by Reuters, while another report showed surprisingly strong May industrial production and manufacturing output.
Following the news, markets slightly increased bets on two Federal Reserve interest rate cuts this year, LSEG’s FedWatch showed, despite U.S. central bankers’ most recent projections for just one easing.
Financial and technology led advances among the 11 S&P 500 sectors, up 0.64% and 0.61% respectively, while communication services and consumer discretionary were the biggest losers.
Fed officials’ comments on Tuesday offered nothing compelling to trade on. New York Fed President John Williams said rates will gradually come down, while Richmond Fed’s Thomas Barkin said he required more months of economic data before supporting a rate cut.
U.S. markets will be closed on Wednesday for the Juneteenth holiday.
Hopes for multiple rate cuts this year, excitement for AI-related companies and robust earnings from other tech firms have bolstered equities in recent months, with gains concentrated in a few heavily weighted stocks.
Citigroup raised the year-end target for the S&P 500 to 5,600 points from 5,100.
The Dow Jones Industrial Average rose 56.76 points, or 0.15%, to 38,834.86. The S&P 500 climbed 13.80 points, or 0.25%, to 5,487.03 and the Nasdaq Composite gained 5.21 points, or 0.03%, at 17,862.23.
The S&P/TSX ended up 23.42 points, or 0.1%, at 21,611.30, after it posted on Monday its lowest closing level in three months.
The energy sector in Toronto rallied 1.6% as the price of oil extended its recent gains, settling 1.5% higher at US$81.57 a barrel, on escalating tensions in Europe and the Middle East.
Ballard Power Systems jumped 6.8% after the fuel cell manufacturer announced a technology partnership with packaging firm Vertiv.
The materials group, which includes metal miners and fertilizer companies, added 0.7% as gold and copper prices rose.
Information technology was a drag, slipping 1.1%, with Lightspeed Commerce Inc ending 5.5% lower.
Industrials and real estate both lost 0.5%.
In U.S. stock moves, shares of education technology provider Chegg rose 3.45% after announcing job cuts in a restructuring.
Homebuilder Lennar fell 4.98% after forecasting lower-than-expected third-quarter home deliveries.
Advancing issues outnumbered decliners by a 1.79-to-1 ratio on the NYSE, which had 259 new highs and 93 new lows. Volume on U.S. exchanges was 10.96 billion shares, compared with the 11.79 billion average for the full session over the last 20 trading days.
Reuters, Globe staff
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