[New York Stock Exchange] Three Major Indices Close Higher... Nvidia Surpasses $4 Trillion Market Cap

S&P 500 and Nasdaq Hit Record Highs
Minimal Market Impact Despite Trump's Tariff Letter Pressure

The three major indices on the New York Stock Exchange closed higher, led by gains in technology stocks. Notably, Nvidia surpassed a market capitalization of $4 trillion for the first time ever during intraday trading.

Reuters Yonhap News

On July 9 (local time), at the New York Stock Exchange, the blue-chip Dow Jones Industrial Average closed at 44,458.30, up 217.54 points (0.49%) from the previous session. The large-cap S&P 500 Index rose 37.74 points (0.61%) to 6,263.26, while the tech-heavy Nasdaq Index gained 192.87 points (0.94%) to close at 20,611.34.

On this day, Nvidia’s share price traded at $164.42 in early trading, making it the first company in the world to surpass a $4 trillion market capitalization. After first breaking the $2 trillion mark in February 2024 and exceeding $3 trillion in June of the same year, Nvidia reached $4 trillion in just about a year. However, as some investors took profits late in the session, Nvidia's closing market cap fell below $4 trillion.

Nvidia’s momentum spread across the broader technology sector, driving both the S&P 500 and the Nasdaq to new record highs. Ross Mayfield, investment strategist at Baird, said, "The market is ignoring tariff threats and believes there is room for negotiation and deal-making." He added, "The extension of the deadline to August 1, and discussions about a possible further extension, are seen as signs of willingness to negotiate, so the market is likely to maintain this stance until new evidence emerges."

Although U.S. President Donald Trump said the previous day that he would not extend the tariff deadline beyond August 1, the market believes that President Trump could adjust the tariffs again, as he is using them as a bargaining chip. Additionally, the market views Trump's letter specifying new tariff rates for seven countries, including the Philippines, as a move that reduces uncertainty. The fact that letters have not yet been sent to India and the European Union (EU) is seen by the market as a sign of progress in negotiations.

By sector, all industries except consumer staples, energy, and real estate posted gains. Utilities rose by 1%.

By stock, the artificial intelligence (AI) theme continued to lead the market, with Microsoft, Amazon, Meta, and Alphabet all climbing by more than 1%. Tesla, however, continued its recent decline, with its market cap falling below $1 trillion.

Elsewhere, Starbucks, the world’s largest coffee chain, ended slightly higher despite reports that it is selling a stake in its China business unit, which could value the division at up to $10 billion. U.S. energy company AES surged 20% after reports that it is considering a sale of the company. In contrast, UnitedHealth Group fell nearly 2% after reports that the U.S. Department of Justice has launched an investigation into its Medicare billing practices.

Meanwhile, minutes from the June Federal Open Market Committee (FOMC) meeting, released in the afternoon, confirmed that Federal Reserve officials are divided over whether to cut interest rates this year. According to the minutes, "a couple of" participants at last month’s meeting said that "if data evolve as expected, they would be open to considering a reduction in the target range for the federal funds rate at an upcoming meeting." These two are believed to be Governor Christopher Waller and Vice Chair for Supervision Michelle Bowman, both of whom had hinted at the possibility of a rate cut as early as this month following the June FOMC.

According to the Chicago Mercantile Exchange (CME) FedWatch Tool, the federal funds futures market priced in a 63.9% probability of a 25 basis point (1bp = 0.01 percentage point) rate cut in September. This was up from 60.8% at the previous day’s close. The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) fell 0.87 points (5.18%) to 15.94.