What’s News in Markets: Nvidia’s Record, Stalled Rivian, Destination Moon
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Hey, listeners. It's Saturday, February 24th. I'm Francesca Fontana for The Wall Street Journal, and this is What's News in Markets, our look at the biggest stock moves of the week and the news that drove them. Let's get to it. If you felt like NVIDIA was the only stock that mattered this week, you're not totally wrong. Thanks in large part to the company's monster earnings, the S&P 500 hit its 13th record of 2024 on Friday, closing at nearly 5,090. And the Dow crossed 39,000 for the first time, and by the end of the week marked another record. It's 14th of the year. Now let's go back to NVIDIA. All eyes were on its quarterly results this week, since the chipmaker is really the bellwether of the AI boom.
And to say that those results were great is a total understatement. NVIDIA's quarterly profit surged more than eightfold from a year earlier, and its sales more than tripled. For those of us who aren't too tech savvy, the cliff notes of why NVIDIA matters so much is this. Everyone's hungry for AI. Businesses are spending massive amounts to build their own AI systems, and NVIDIA makes the chips that power those systems.
How did Nvidia's earnings push the S&P 500 and Dow to record highs?
And businesses want to get their hands on these chips as fast as possible. This is great for Nvidia and other chip makers because demand is straight up exploding. So much, in fact, that it's exceeding Nvidia's manufacturing capacity, leading to long-lasting shortages and production bottlenecks and other issues. But that's less of a concern for investors, clearly, because Nvidia's stock has been red hot. Shares jumped 16% on the news Thursday, and that jump boosted Nvidia's market valuation by $277 billion, the biggest one-day increase ever for a U.S. company. Not to mention, on Friday, its market value hit a whopping $2 trillion before dipping back below that mark. The ripple effects spread far and wide, and they lifted the stocks of other chip makers, tech firms, and the broader market.
And let's not forget that Nvidia is in what's known as the Magnificent Seven. So the jump in market value also gave that group of tech titans, Microsoft, Meta, Alphabet, Tesla, Apple, and Amazon, another big boost. One stock that lost some of its electric charge, on the other hand, was Rivian Automotive. Rivian's a high-profile startup in the electric vehicle or EV space, and its quarterly results were not the total blockbuster showstopper that NVIDIA's were. In fact, they came in weaker than Wall Street was expecting. Rivian predicts that its output is going to be flat this year, and it's laying off about 10% of its workers. Sales growth of electric cars has been slowing down after a big frenzy a few years ago, so it begs the question, what's the hang-up for buyers?
It's money, really. Higher interest rates are making monthly car payments more expensive, the cost of living has gone up, and a lot of people are less willing to splurge on the high price of an electric car. So these companies like Rivian, Tesla, etc., they've seen this and they're like, okay, the price tag is too high, let's cut it. Rivian, for example, cut the starting price of its trucks by about $3,000 earlier this month, down to the low, low price of $70,000. Now, how did the stock do after that report? It got smashed. Rivian shares dropped more than 25% on Thursday and kept moving lower on Friday, reaching an all-time low.
This last one is for all of the space nerds out there, and who among us is not at least a little bit stoked that America is going back to the moon? It's pretty cool. The uncrewed Odysseus spacecraft landed on the moon Thursday, the first time that the U.S. has touched down in more than 50 years. Historically, NASA has handled these moon missions in-house, but Odysseus was the first spacecraft that was built by a private space exploration company.
Why did Nvidia's quarterly results cause such a historic one‑day market gain?
That company is Intuitive Machines, and it's got one of my new favorite tickers. It's L-U-N-R, aka Lunar. Get it? Lunar, moon, it's great. The stock jumped about 16% on Friday, and that was the stock's second largest move after it jumped 50% at the start of the week.
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Chapters
3 chaptersSpeakers
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