The S&P 500 eked out a small gain Wednesday as investors evaluated their holdings following a booming first half of the year led by artificial intelligence plays.
The broad market index ended the day up 8.60 points, or 0.16%, to close at 5,477.90. The Dow Jones Industrial Average added 15.64 points, or 0.04%, to end at 39,127.80. Meanwhile, the tech-heavy Nasdaq Composite added 87.50 points, or 0.49%, to finish at 17,805.16.
The Nasdaq is set for a 18.6% first-half gain because of a big run in Nvidia. After trading lower for much of the day, the chipmaker closed up around 0.3%. It was a modest move after Tuesday’s 7% climb. The AI chipmaker’s $3.1 trillion market value has come to dominate the cap-weighted S&P 500, and its 150% surge in 2024 has sparked concerns that most other stocks are failing to participate in this year’s rally.
Shares of Amazon jumped 3.9%, leading the Nasdaq’s upward climb. The stock reached an all-time high and topped $2 trillion in market value for the first time on Wednesday, joining Nvidia, Apple, Alphabet and Microsoft in reaching the milestone.
Outside of Big Tech names, the market was mostly sluggish as investors await fresh inflation data on Friday with the release of May’s personal consumption expenditures price index. The Federal Reserve keeps a close eye on this gauge, and investors are hopeful that the central bank will lower interest rates at some point later this year if price increases continue to moderate.
The recent pullback across the broader market has raised speculation of whether the 2024 rally, largely powered by Nvidia, has run its course. The S&P 500 is trading less than 1% from where Wall Street strategists anticipate the broad market index ending the year at, according to the CNBC Market Strategist Survey.
“The stock market right now is very expensive,” said David Bahnsen, chief investment officer at The Bahnsen Group. The investor believes a share price correction and reckoning is ahead for megacap tech names.
“Whether or not the past week’s volatility in tech stocks is the start of something deeper, or if that reckoning is still forthcoming remains to be seen, but excessive investor sentiment, euphoria and overdone momentum always ends the same,” Bahnsen added.
Most stocks were lower in the S&P 500 on Wednesday, but there were some positive standouts in the market. FedEx popped 15.5% after issuing better-than-expected fiscal fourth-quarter results. Rivian Automotive soared 23.2% after Volkswagen Group said it would invest up to $5 billion in the electric vehicle company.
