A rally in Nvidia shares sent its main stock indexes higher Wall Street, S&P 500 and Nasdaq, one day after the liquidation of shares in the American giant that manufactures chips used in artificial intelligence systems.
The index S&P 500 rose 0.39% to 5,469.30 units, while Nasdaq recorded gains of 1.26% to 17,717.65 points. Both indices ended a three-day downtrend. On the contrary, the Dow Jones Index lost 299.05 points or 0.76% to close at 39,112.16 points.
O Nvidia shares rose 6.7%, although during Monday’s session it fell more than 6%, the biggest daily drop since April 19, when it lost 10% of its value.
The decline caused Nvidia, the darling child of artificial intelligence, to enter a correction environment, falling more than 13%, dragging other semiconductor companies, including Super Micro Computer, Qualcomm and Broadcom, into the red.
Nvidia’s losses sent the Nasdaq down more than 1% in Monday’s session, the biggest daily drop since April. The Nasdaq 100 also had its worst session since April as investors sold off stocks in the semiconductor sector.
According to Chris Zaccarelli, chief investment officer at the Association of Independent Advisors, he considered the decline of Nvidia and other big names in the technology sector a temporary solution.
“Technology is driving the market again and Nvidia has changed its sign. This year is still about technology and artificial intelligence. Valuations are quite high, but the AI recovery has a much longer track record than the dot.com bubble. All high-performing stocks have strong profitability,” he explained.
The investor remains optimistic that the bull market will continue to decline, noting that artificial intelligence has replaced interest rate cuts as the driving force fueling the market recovery.
Several big names in the technology space, which posted losses in Monday’s session, recovered in today’s session. Amazon rose 0.4%, while Meta and Google each recovered more than 2%.
However, SolarEdge Technologies plunged 21% after announcing plans to issue $300 million in convertible bonds.