NVDA Surpasses $2.5 Trillion Market Cap Amidst Market Decline

NVDA's Impressive Performance

NVDA, a leading company in the AI industry, has seen a significant increase in its market cap, reaching over $2.5 trillion for the first time. This comes after the company's impressive earnings and guidance, which saw its shares surge by over 10%.

US Market Cap Decline

While NVDA's performance has been stellar, the overall US market cap has seen a decline. With a roughly 1% decrease in US stocks, the total US market cap fell by around $500 billion. However, NVDA alone added $230 billion to its value.

US Economy Update

Despite the market cap decline, there was positive news about the US economy. US PMIs have reached a two-year high, indicating that Biden's economic policies are yielding positive results. Furthermore, jobless claims remain at near-record lows. Although new home sales were weak, the market seemed to overlook this.

Market Response to Good News

Interestingly, the positive economic news resulted in a negative response from the markets. Rate-cut expectations fell further, with the market now predicting only a chance of two rate cuts this year and reducing 2025's expectations to just three more cuts.

Market Performance Overview

As NVDA continued to reach new highs, other sectors experienced declines. Stocks fell sharply, and oil, gold, and crypto also saw significant drops. Bonds were battered, with only the US Dollar managing to gain, recovering from overnight weakness.

Performance of Small Caps and The Dow

Small Caps and The Dow were the day's biggest losers, with the latter affected by Boeing's breakdown. Despite NVDA's surge, Nasdaq and S&P also saw significant declines.

Performance of 'Most Shorted' Stocks

'Most Shorted' stocks continued their downward trend as short-squeezes seem to have run out of steam.

Performance of Magnificent 7 Stocks

The Magnificent 7 stocks initially surged, thanks to NVDA, but had given back all their gains by the close of the day.

Treasury Yields and Dollar Performance

Treasury yields were up across the board, with the short-end slightly lagging. The dollar rebounded from overnight lows to end higher.

Gold and Bitcoin Performance

Gold saw a sharp decline, while Bitcoin hit $70,000 before experiencing a significant drop. However, Ethereum held onto its gains as hopes for the approval of ETH ETFs rise.

Oil Prices

Oil prices fluctuated to end at three-month lows.

Inflation Indicators

Inflation indicators continue to surprise to the upside, and growth is also getting a boost. This is not an obvious scenario for rate-cutting, especially considering it's an election year and Biden's ratings are down. However, the apolitical Fed's actions remain unpredictable.

Final Thoughts

It's fascinating to see how the market reacts to various factors, from company performances to economic indicators. NVDA's impressive market cap milestone amidst a general market decline is a testament to its strength. However, the overall market's response to positive economic news raises interesting questions about investor sentiment and expectations. What are your thoughts on these market dynamics? Feel free to share this article with your friends and engage in a discussion. Don't forget to sign up for the Daily Briefing, which is available every day at 6 pm.