[New York Stock Market] Nasdaq Hits All-Time High Ahead of Nvidia Earnings... Dow Down 0.49%

The three major indices of the U.S. New York stock market closed mixed near the flat line on the 20th (local time), ahead of the release of Nvidia's earnings and the Federal Open Market Committee (FOMC) minutes. Nvidia's stock price rose more than 2%, pushing the tech-heavy Nasdaq index to an all-time high.

On this day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average fell 0.49% from the previous session to close at 39,806.77. The large-cap S&P 500 index rose 0.09% to 5,308.13, and the tech-focused Nasdaq index closed up 0.65% at 16,794.87.

By individual stocks, Nvidia, which is about to announce earnings, rose 2.49% as Wall Street investment banks raised their price targets. Microsoft (MS) increased by 1.22%, while Tesla fell 1.41%. Jamie Dimon, CEO of JP Morgan, known as the "Wall Street Emperor," hinted that his retirement might come earlier than previously announced, causing JP Morgan's stock to drop 4.5%. Norwegian Cruise Line Holdings surged nearly 8% following better-than-expected earnings and an upward revision of annual guidance. Telehealth company Hims & Hers jumped about 28% due to the introduction of GLP-1 weight loss injections.

[Image source=Reuters Yonhap News]

The biggest market focus this week is Nvidia's earnings report, which will be released after the market closes on the 22nd. Economic media CNBC reported that this will confirm the strength of the artificial intelligence (AI) rally led by Nvidia so far. The market expects Nvidia's revenue and net profit to surge by 242% and 529%, respectively, driven by increased demand for AI chips.

Ahead of the earnings announcement, Stifel raised Nvidia's price target from $910 to $1,085. Barclays increased it from $850 to $1,100, and Baird raised it from $1,050 to $1,200. Nvidia's stock price has risen more than 200% over the past year. Tom Lee, Head of Research at Fundstrat Global Advisors, analyzed, "Overall, Nvidia's earnings are expected to enhance visibility on AI and related spending," adding, "As a result, it will be positive for tech stocks and the broader market."

The U.S. Federal Reserve's May FOMC minutes will also be released on the 22nd. Earlier, Fed Chair Jerome Powell had indicated that if there is no progress in the inflation slowdown, the high interest rate stance would be prolonged, but he dismissed the possibility of a rate hike, which was considered more dovish than expected. Attention is focused on what assessment the FOMC members made regarding inflation and the economic situation. Mohamed El-Erian, advisor to Allianz Group, previously emphasized on his X (formerly Twitter) account right after the FOMC that while Powell's remarks were dovish, "we need to see the minutes to determine whether they accurately reflect the FOMC members' discussions or just Powell's personal views."

On this day, Fed Vice Chair Philip Jefferson said it is too early to conclude whether the disinflation slowdown trend will continue, while giving a positive assessment of recent inflation indicators. The previously released core Consumer Price Index (CPI) came in below expectations, bolstering hopes for a Fed rate cut. Loretta Mester, President of the Cleveland Federal Reserve Bank, also said in an interview with Bloomberg News, "Considering the first-quarter inflation indicators, I no longer think three rate cuts in 2024 are appropriate."

This week, public speeches are scheduled from Fed Governor Christopher Waller, Fed Vice Chair for Supervision Michael Barr, Raphael Bostic, President of the Atlanta Fed, and John Williams, President of the New York Fed. Earnings reports from companies such as Palo Alto and Ralph Lauren are also ongoing.

Recently, the New York stock market has shown strength, with the S&P 500 index recording gains for four consecutive weeks. The Dow Jones index also rose for five consecutive weeks. Michael Wilson, Morgan Stanley's Chief Equity Strategist, known as a leading Wall Street pessimist, also predicted that the S&P 500 could surpass 5,400 in the first half of next year. Vincent Heaney, UBS strategist, analyzed, "Although economic and geopolitical risks remain, a strong economy, earnings outlook, rate cut expectations, and increased AI investment will support the stock market this year."

Government bond yields rose. In the New York bond market, the U.S. 10-year Treasury yield, a global benchmark, hovered around 4.44%. The 2-year yield, sensitive to monetary policy, stood near 4.85%. The dollar index, which shows the value of the dollar against six major currencies, rose more than 0.1% from the previous session to 104.5. Gold prices hit an all-time high during the session, surpassing $2,449 per ounce.

Oil prices closed lower despite news of the Iranian president's death in a helicopter crash. On the New York Mercantile Exchange, the near-month June delivery West Texas Intermediate (WTI) crude oil fell $0.26 (0.32%) to close at $79.80 per barrel.