S&P 500, Nasdaq hit record highs as Nvidia rally powers tech gains

By Ragini Mathur and Utkarsh Hathi

May 14 (Reuters) – The S&P 500 and the Nasdaq touched fresh intraday record highs on Thursday, powered by Nvidia’s gains and another rally in technology shares, as investors assessed fresh economic data and a high-stakes U.S.-China summit.

Nvidia rose 3.9%, giving the chipmaker a market valuation of about $5.7 trillion, after Reuters reported citing sources that the U.S. has cleared about 10 Chinese firms to buy its second-most powerful AI chip, the H200.

The gains fueled a weeks-long rally in technology stocks, especially chipmakers, that has helped drive Wall Street to repeated records despite lingering concerns over the Middle East conflict.

“Nvidia has clearly been a big beneficiary, both from the China announcement and from the broader artificial intelligence theme,” said Chris Zaccarelli, chief investment officer at Northlight Asset Management.

“The underlying AI theme and trend is real — we just think investors may be pulling a little too much forward from the future.”

Meanwhile, Cisco soared 14.4% to an all-time high after the tech networking giant said it would cut nearly 4,000 jobs as part of a restructuring, and raised its annual revenue forecast after a surge in hyperscaler orders.

U.S. retail sales increased 0.5% in April, in line with estimates, but some of the rise in receipts was likely due to higher inflation as the war with Iran boosted prices of energy products and other commodities.

Additionally, the number of Americans filing claims for unemployment benefits increased moderately last week, pointing to a stable labor market. 

At 12:08 p.m. ET, the Dow Jones Industrial Average rose 492.38 points, or 0.99%, to 50,185.58, the S&P 500 gained 71.35 points, or 0.96%, to 7,515.60 and the Nasdaq Composite gained 294.47 points, or 1.12%, to 26,696.82.

The Dow was hovering near its all-time high.

Seven of the eleven main S&P 500 sectors were in positive territory, with technology leading gains, rising 2.1%.

Software shares, which have struggled this year, also advanced. The S&P 500 software index rose 1.4%, though it remained down 16.3% year-to-date.

Financials gained 0.7%, with asset managers also moving higher. Apollo Global, Blackstone and Ares Management rose between 3.3% and 4%.

Investors were also watching the U.S.-China summit, where Chinese President Xi Jinping told President Donald Trump at the start of two days of talks that trade negotiations were making progress. Xi, however, warned that tensions over Taiwan could put relations on a dangerous path and even risk conflict.

Trump’s visit comes as markets remain focused on the war with Iran. A White House official said the leaders of the world’s two largest economies agreed that the Strait of Hormuz should remain open and that Iran should never obtain nuclear weapons.

This week’s stronger consumer prices and producer prices readings have reinforced expectations that the Federal Reserve will keep monetary policy restrictive for longer. 

Advancing issues outnumbered decliners by a 2.43-to-1 ratio on the NYSE, and by a 1.85-to-1 ratio on the Nasdaq.

The S&P 500 posted 25 new 52-week highs and 8 new lows while the Nasdaq Composite recorded 87 new highs and 104 new lows.

(Reporting by Ragini Mathur and Utkarsh Hathi in Bengaluru; Editing by Devika Syamnath)