[New York Stock Exchange] AI Rally Reignited by Jensen Huang’s Remarks... S&P and Nasdaq Hit New Highs Again

Jensen Huang: "Significant Increase in Computing Demand Over the Past Six Months"
Nvidia Up 2.2% as Tech Stocks Lead the Rally
September FOMC Minutes Released; Divided Outlook on Rate Cuts This Year
Shutdown Enters Eighth Day but Market Remains Calm; Senate Rejects Temporary Budget Bill Again

The three major indices of the New York Stock Exchange closed mixed on October 8 (local time). Despite the ongoing U.S. federal government shutdown, investors generally remained calm. Technology stocks rallied, driven by comments from Nvidia CEO Jensen Huang, pushing both the S&P 500 Index and the Nasdaq Index to new record highs.

On this day at the New York Stock Exchange, the blue-chip Dow Jones Industrial Average closed at 46,601.78, down 1.20 points (less than 0.1%) from the previous trading day. The large-cap S&P 500 Index rose by 39.13 points (0.58%) to close at 6,753.72, while the tech-heavy Nasdaq Index jumped 255.015 points (1.12%) to end at 23,043.378.

The previous day, the market had declined due to fatigue from the artificial intelligence (AI) rally and profit-taking. However, on this day, bargain hunting in technology stocks led to a rebound in both the S&P 500 and Nasdaq within just one day. CEO Huang’s remarks boosted investor sentiment. In an interview with CNBC, he stated, “This year, especially over the past six months, demand for computing has increased significantly.” He also confirmed Nvidia’s investment in xAI, the AI startup founded by Tesla CEO Elon Musk, saying he was “very excited” about it.

These comments reignited AI-related investment sentiment, and expectations for additional interest rate cuts by the Federal Reserve further outweighed concerns about an 'AI bubble.'

Ross Mayfield, strategist at Baird Investment, analyzed, “Demand still exists, and Nvidia is in the best position in the world to speak on this issue,” adding, “It is reassuring that capital expenditures are not entirely cyclical.”

Investors also paid close attention to the minutes of the September Federal Open Market Committee (FOMC) meeting released on this day. Of the 19 total Fed committee members, all 12 voting members supported a rate cut of at least 0.25 percentage points at the September meeting. Last month, the Fed lowered the benchmark interest rate by 0.25 percentage points from 4.25-4.5% per annum to 4.0-4.25%. Specifically, 11 members supported this decision, while only Fed Governor Steven Myron, known as President Donald Trump’s “economic adviser,” advocated for a 0.5 percentage point cut. Concerns about a slowdown in the labor market were commonly noted among the committee members.

However, outlooks on the number of rate cuts within the year were divided. Of the 19 total members, 10 expected two cuts, while the remaining nine anticipated one or fewer. As a result, it appears that debates within the Fed over future rate decisions will continue.

The federal government shutdown has now entered its eighth day. The Senate put the temporary budget bill to a vote again, but it was once again rejected. This marks the sixth rejection, raising concerns that a prolonged shutdown could negatively affect investor sentiment.

U.S. Treasury yields remained steady. The 10-year yield, a global benchmark for bond rates, stood at 4.13%, unchanged from the previous day, while the 2-year yield, which is sensitive to monetary policy, rose by 1 basis point (1bp = 0.01 percentage point) to 3.58%.

By stock, Nvidia jumped 2.2%. Oracle rose 1.54%. After falling the previous day on reports that its cloud business profits had fallen well short of market expectations, Oracle managed to rebound within a day. Microsoft rose 0.17%, and Meta, Facebook’s parent company, gained 0.67%.