[New York Stock Exchange] Optimism for AI and Big Tech Earnings Pushes All Three Major Indices to New Highs... Nvidia Up 5%

Nvidia Surges 5% to Hit Record High
Apple Surpasses $4 Trillion Market Cap Intraday for the First Time; Microsoft Rejoins $4 Trillion Club
Earnings from Microsoft, Apple, Alphabet in Focus This Week
Fed Expected to Cut Rates on the 29th; Ho

On October 28 (local time), all three major U.S. stock indexes rose together, once again setting new all-time highs. Investors actively bought stocks related to artificial intelligence (AI) innovation and the ongoing rally, driven by expectations that these trends would continue, just one day ahead of the U.S. Federal Reserve's (Fed) interest rate decision. Apple briefly surpassed a market capitalization of 4 trillion dollars for the first time during the session.

On the 27th (local time), traders were working on the trading floor of the New York Stock Exchange (NYSE) in the United States. Photo by Reuters Yonhap News

On this day at the New York Stock Exchange, the blue-chip-focused Dow Jones Industrial Average closed at 47,706.37, up 161.78 points (0.34%) from the previous trading day. The large-cap S&P 500 index rose 15.73 points (0.23%) to 6,890.89, while the tech-heavy Nasdaq index jumped 190.037 points (0.8%) to finish at 23,827.493. With these gains, all three major indexes continued their streak of record highs.

By sector, technology stocks showed broad strength. Nvidia, the leading AI stock, surged 4.98% to close at 201.03 dollars per share, once again reaching a new record high amid strong buying interest. At a developer event (GTC) held in Washington, D.C. that day, Nvidia announced a plan to acquire a 1 billion dollar stake in Nokia, and Nokia stated it would use the funds to invest in its AI business. Another semiconductor stock, Broadcom, also rose 3.02%. Microsoft climbed 1.98%, once again surpassing a 4 trillion dollar market capitalization. On the same day, OpenAI announced a governance restructuring under which Microsoft would hold a 27% stake in OpenAI's for-profit entity, and the two companies would strengthen their AI collaboration. Apple gained 0.07%. Buoyed by strong sales of the iPhone 17, Apple's share price rose and briefly surpassed a 4 trillion dollar market cap for the first time, following Nvidia and Microsoft, but it gave back most of its gains by the end of the session.

The market is closely watching this week's big tech earnings announcements. On October 29, Microsoft, Alphabet (Google's parent company), and Meta (Facebook's parent company) will release their results, followed by Amazon and Apple on October 30. The so-called "Magnificent 7" (M7)-the seven big tech companies that account for a quarter of the S&P 500's market capitalization-are expected to determine whether the stock market rally will continue. There is growing optimism in the market that the AI boom will justify the high stock prices of these companies.

Mike Dickson, Head of Research and Quantitative Strategy at Horizon Investments, commented, "Clearly, by historical standards, valuations have become quite high, and we've received all the support we can get from the Fed as long as nothing bad happens. As a result, this market can only be driven by earnings. We need to see what these giant companies (big tech) have to say."

Ray Dalio, founder of Bridgewater Associates and known as the "godfather of hedge funds," also commented in a CNBC interview that day regarding the AI rally, "There are quite a few frothy elements in the current market, but it won't burst until monetary policy shifts to tightening." While warning of an AI bubble, he also predicted that the bull market would continue for the time being.

The high likelihood that the Fed will cut its benchmark interest rate at the Federal Open Market Committee (FOMC) regular meeting on October 29 also supported investor sentiment. Previously, the Fed lowered its benchmark rate by 0.25 percentage points to 4.0-4.25% last month, and the market now sees a 99.9% chance of an additional 0.25 percentage point cut this month. Investors are hoping that Fed Chair Jerome Powell will signal another rate cut in December.

The growing possibility of a "trade truce" at the U.S.-China summit, scheduled to take place in Busan, South Korea, on October 30, also provided upward momentum. The Wall Street Journal (WSJ) reported that if China steps up its crackdown on the distribution of precursor chemicals for fentanyl, the United States plans to reduce the current 20% tariff on fentanyl imports from China to as low as 10%.

Adam Turnquist, Chief Technical Strategist at LPL Financial, said, "Another round of solid earnings, signs of easing inflationary pressures, strengthened expectations for rate cuts, and the confirmation of a summit between President Donald Trump and Chinese President Xi Jinping later this week all supported buying pressure. This week, as 30 Nasdaq-listed companies announce their earnings, the strength of fundamentals will be in the spotlight."

U.S. Treasury yields remained steady. The yield on the 10-year Treasury note, the global benchmark for bond yields, fell by 1 basis point (1bp = 0.01 percentage point) from the previous session to 3.97%, while the yield on the 2-year Treasury note, which is sensitive to monetary policy, remained unchanged at 3.48%.