U.S. Stocks Hit Record Highs as Nvidia Surges Past $5 Trillion; Fed Decision Looms
U.S. stock markets soared to new records Tuesday, powered by a massive rally in Nvidia and renewed optimism in the technology sector ahead of the Federal Reserve’s next interest rate decision.
Shares of Nvidia jumped 5 percent to close at an all-time high, lifting the company’s market capitalization to $4.89 trillion — making the AI chip giant the first in history to cross the $5 trillion threshold in intraday trading. The surge followed Nvidia’s GTC event in Washington, D.C., where the company unveiled a series of announcements that reinforced its dominance in the artificial intelligence hardware market.
The broader tech rally pushed all three major U.S. indexes to fresh highs. The S&P 500 rose 0.23 percent to 6,890.89 after briefly topping 6,900 points for the first time. The Nasdaq Composite advanced 0.80 percent to 23,827.49, while the Dow Jones Industrial Average gained 161.78 points to finish at 47,706.37. All three indexes notched record intraday and closing levels.
The market momentum comes on the eve of the Fed’s much-anticipated policy announcement. Investors overwhelmingly expect a second interest rate cut of 2025 but are also looking for signals from Fed Chair Jerome Powell that another reduction could come before the end of the year, as inflation data remain uneven and growth indicators mixed.
Microsoft, Apple Cross $4 Trillion in Value
Tuesday’s rally also vaulted Microsoft and Apple past $4 trillion in market capitalization, underscoring the tech sector’s continued dominance.
Microsoft’s shares rose about 2 percent after the company confirmed it had completed the acquisition of a 27 percent stake in OpenAI’s commercial arm. The investment deepens Microsoft’s long-standing partnership with the AI pioneer, which began in 2019. The company is set to report earnings Wednesday.
Apple also saw strong gains, buoyed by robust sales of the iPhone 17 series, launched in September. Shares have climbed 25 percent over the past three months, bringing Apple within striking distance of a $4 trillion market cap. The company reports quarterly earnings Thursday.
JPMorgan analyst Samik Chatterjee wrote Monday that Apple shares are entering the earnings season “with more positivity than at any point in the past year,” maintaining a buy rating and lifting his price target to $290 per share.
Apple’s efforts to diversify its supply chain away from China — shifting production to India and Vietnam — have also helped shield it from potential new tariffs under former President Donald Trump’s trade policies.
Earnings Season Exceeds Expectations
The so-called “Magnificent Seven” tech giants continue to steer market sentiment. Amazon, Alphabet, and Meta are scheduled to report later this week. Together, the top five tech companies now account for roughly one-quarter of the S&P 500’s value.
Of the companies that have reported so far, about one-third of the S&P 500, 83 percent have exceeded Wall Street expectations, according to FactSet. “It’s been a fantastic earnings season,” said Mike Dixon of Horizon Investments in an interview with CNBC.
Fed Policy and Global Politics in Focus
While markets celebrated record highs, attention is turning to Washington and global geopolitics. The Fed’s upcoming decision will come just a day before former President Trump’s planned meeting with Chinese President Xi Jinping, amid renewed trade tensions.
Trump told reporters Monday that he expects the two sides to “come out with” a trade deal, though details remain uncertain. Talks are expected to cover China’s restrictions on rare earth exports, U.S. soybean purchases, and the future of TikTok.
The Wall Street Journal reported Tuesday that the U.S. may consider easing tariffs on Chinese imports if Beijing takes stronger action to curb the export of chemicals used to produce fentanyl — an issue that has increasingly complicated bilateral relations.
As investors await the Fed’s next move and the outcome of high-stakes diplomacy, Wall Street’s rally suggests confidence that the U.S. economy — and especially its tech leaders — remain on solid ground despite the global crosswinds.
