The S&P 500 notched a record high close on Wednesday ahead of quarterly results from Nvidia, Wall Street's most closely watched event this week, which will test the rally that has pushed valuations of AI-related companies to levels that some investors view as too high, APA reports, citing Reuters.
Shares of Nvidia, the world's most valuable company and the leading supplier of cutting-edge AI processors, bounced between gains and losses before ending down 0.1% ahead of the report, due after the market closes.
With Nvidia making up about 8% of the S&P 500, its financial results affect vast numbers of Americans who use index investment funds to save for retirement.
"Nvidia is going to produce humongous revenue gains over the next nine months, on top of an already humongous revenue base," said Jed Ellerbroek, portfolio manager at Argent Capital.
"Investors should prepare themselves for a world where Nvidia is a double-digit percentage of the S&P 500."
Shares in tech and AI heavyweights were mixed, with Microsoft (MSFT.O), gaining nearly 1% and Meta Platforms (META.O), dipping almost 1%. They, along with Alphabet (GOOGL.O), and Amazon (AMZN.O), are among Nvidia's biggest customers.
Nvidia options implied a roughly 6% swing for the shares in either direction following the results.
Investors will closely watch the impact of the Sino-U.S. trade war on Nvidia's China business earlier this year, along with the effect on forecasts from its recent revenue-sharing deal with the U.S. government.
The S&P 500 climbed 0.24% to end the session at 6,481.40 points, exceeding its previous record high close on August 14.
The Nasdaq gained 0.21% to 21,590.14 points, while the Dow Jones Industrial Average rose 0.32% to 45,565.23 points.
Eight of the 11 S&P 500 sector indexes rose, led by energy (.SPNY), up 1.15%, followed by a 0.48% gain in information technology (.SPLRCT).
Investors were also watching for developments related to U.S. President Donald Trump's attempt to fire Federal Reserve Governor Lisa Cook, a move likely to face legal challenges.
If Trump succeeds, he would nominate a replacement to the central bank's board who could be expected to back his policy preferences, challenging the central bank's independence.
Investors are pricing in a 25-basis-point interest-rate cut in September, according to data compiled by LSEG, with most big brokerages also leaning in that direction.
New York Federal Reserve Bank President John Williams said on CNBC it is likely interest rates can fall at some point but policymakers need to see upcoming economic data to decide if a rate cut is appropriate at the Fed's September meeting.
MongoDB (MDB.O), soared 38% after the software-maker raised its annual profit forecast.
J.M. Smucker (SJM.N), fell 4.4% after the Jif peanut butter maker missed first-quarter profit estimates.
Advancing issues outnumbered falling ones within the S&P 500 (.AD.SPX), by a 2.2-to-one ratio.
The S&P 500 posted 28 new highs and 1 new lows; the Nasdaq recorded 127 new highs and 35 new lows.
Volume on U.S. exchanges was relatively light, with 14.0 billion shares traded, compared to an average of 16.9 billion shares over the previous 20 sessions
