S&P500 and Nasdaq: Nvidia’s $5.7 Trillion Rally Sends US Stocks to Records

Nvidia Leads Another Record Run in Tech Stocks

The S&P 500 closed at 7,498.10, up 0.72%. The Nasdaq Composite gained 0.86% to 26,628.07. The Dow rose 361 points or 0.73% to 50,185.58, closing in on its own record.

Nvidia jumped nearly 4% after reports that the U.S. approved roughly 10 Chinese companies to buy its H200 AI chip. That one headline added fuel to a technology rally that has been running for weeks and pushed Nvidia’s market value to approximately $5.7 trillion. The AI trade is not slowing down and Thursday made that clear.

Technical Outlook

The main trend is up according to the daily swing chart. A trade through Thursday’s high at 26,707.14 will signal a resumption of the uptrend.

The short-term swing is 25,739.22 to 26,707.14. Its pivot at 26,223.18. A break below this level could shift momentum to the downside. However, traders could still have the opportunity to re-enter at much better levels with potential mid-point targets at 25,810.13, 25,599.49 and 25,453.07.

A trade through the minor bottom at 25,739.22 will also be a sign of weakness, however, I wouldn’t say the market has topped until a secondary lower top is formed.

Nvidia and the H200 Approval

The H200 is Nvidia’s second most powerful processor and the approval to sell it into China changes the demand picture meaningfully. Chinese companies that have been locked out of the most advanced American chips now have access to a processor that sits just below the top tier. Nvidia felt the news immediately.

The stock jumped and pulled the broader semiconductor sector with it. Technology gained 2.1% on the session making it the strongest sector of the day by a wide margin. I’ve watched this stock move markets for months and Thursday was another example of how much of Wall Street’s direction runs through one name right now.

Cisco Surprised Everyone

Cisco surged 14.4% to an all-time high after announcing plans to cut nearly 4,000 jobs alongside a raised full-year revenue forecast. The restructuring is being driven by stronger demand from hyperscale data center customers. That combination of job cuts and raised guidance is not a contradiction. It is a company reallocating resources toward the AI infrastructure buildout and the market rewarded it immediately.

Cisco is not typically a headline mover but Thursday it was one of the session’s biggest stories and the reason is the same reason every other technology story is moving right now. AI spending is real and the companies positioned inside it keep delivering.

Software Is Starting to Stir

The S&P 500 software index (XSW) climbed 1.4% Thursday. That group is still down more than 16% for the year so one session does not change the picture but the move is worth noting. Software has been the weak link in the technology trade all year while semiconductors ran. A rotation into software alongside continued semiconductor strength would broaden the AI trade in a way that extends the rally rather than concentrating it further. One session is not a trend. But I am watching it.

Economic Data Held Up

April retail sales rose 0.5% matching expectations. Weekly jobless claims rose modestly but the labor market is still holding together. The economy is not breaking and that keeps the Fed patient.

Seven of eleven S&P 500 sectors closed higher. Advancing stocks outnumbered decliners by more than 2 to 1 on the NYSE. Market breadth was the best it has been in weeks. The Nasdaq still recorded 104 new lows against 87 new highs which tells you the rally remains narrow at the index level even on a strong session. The gains are real but they are concentrated and that distinction matters when you are evaluating how much runway this move has.

Beijing and Tehran Are Still in the Room

Trump and Xi said trade talks are making progress but Taiwan tensions remain unresolved. The Iran conflict is still weighing on oil prices and energy costs keep feeding into the inflation picture that pushed CPI and PPI higher earlier this week. Three consecutive hot inflation prints this week reinforced the view that the Fed holds rates elevated through year end. Investors are aware of that backdrop and choosing to buy technology anyway. The AI momentum trade is running on its own assumptions right now and inflation data that would normally pressure growth stocks is getting ignored. That works until it does not and the breadth numbers on the Nasdaq are the early warning sign worth watching.

What to Watch

The pivot at 26,223.18 is where this market gets tested on any pullback. Hold above it and the uptrend stays intact with 26,707.14 the next target on a push higher. Lose it and the Nasdaq has potential support at 25,810.13, 25,599.49 and 25,453.07 on the way down.

The Nvidia H200 approval was Thursday’s catalyst. What Beijing produces on trade and what Tehran does with the Strait are the catalysts that decide next week. The breadth numbers are the warning sign.

When 104 stocks are hitting new lows on a day the index closes near a record, the rally is narrower than the headline number suggests and narrow rallies are vulnerable to the first headline that cuts against momentum.

More Information in our Economic Calendar.