S&P 500 Hits Record High on NVIDIA Effect [New York Stock Market Morning Briefing]

Oracle and Apple Rise Together…Tech Stocks Drive Gains

Expectations for Gains Through Year-End Despite Federal Government Shutdown Concerns

The New York stock market's S&P 500 index on the 22nd (local time) once again hit a record high, powered by strength in NVIDIA. The announced partnership between NVIDIA and OpenAI is interpreted as having stirred investors' optimism about the future of artificial intelligence (AI).

That day the S&P 500 index closed at 6,693.75, up 0.44%. The Nasdaq rose 0.70% to close at 22,788.98. The Dow Jones Industrial Average climbed 66.27 points (0.14%) to finish at 46,381.54. At one point during the session all three major indexes reached record highs, and the closing values also set records.

The S&P 500 started the session lower but large tech stocks such as NVIDIA led gains and it finished higher. NVIDIA's stock jumped 3.9% after announcing it would invest US$100 billion in OpenAI to build data centers. Sam Stovall, chief investment strategist at CFRA Research, analyzed, "This deal suggests that AI-related revenue and stock gains will continue beyond 2026."

AI-related stock Oracle also led gains that day. Oracle's shares surged 6% after announcing a co-CEO structure. This was in addition to a 45% increase earlier this month. Apple shares also rose 4% on hopes for strong new iPhone sales.

However, concerns over a federal government shutdown limited the market's upside. Last week the Senate rejected temporary spending bills separately proposed by Republicans and Democrats. Afterwards, Senate Democratic Leader Chuck Schumer urged President Donald Trump to negotiate with Democrats. Government funding runs out on September 30.

All three major indexes have risen strongly over the past week and each has reached record highs. The small-cap Russell 2000 also closed at a record level for the first time since November 2021. This was a reaction to the Federal Reserve's first interest rate cut since last December. According to the CME FedWatch tool, traders expect two more 0.25%-point rate cuts by year-end.

Stovall added, "Unless conditions deteriorate sharply within the next three months, the market appears to be signaling that it intends to continue rising through year-end."

This week is traditionally cited as the weakest period for the S&P 500, but the personal consumption expenditures (PCE) price index, the inflation measure favored by the Fed, is scheduled for release. Economists expect inflation to remain moderate, which should support the Fed maintaining its current monetary policy stance. New York=Park Shin-young, correspondent nyusos@hankyung.com