KEY POINTS:
- Nasdaq blasts above 17,000 points.
- Nvidia shares rise on xAI fundraising.
- Dow dragged by rising bond yields.
Bond yields rose, sending shockwaves across real-economy stocks with the Dow ending the day in red territory.
- The Nasdaq Composite IXIC surged to a new all-time high Tuesday after emboldened investors chose to bet on tech once again. The Wall Street benchmark powered higher to cross 17,000 points for the first time ever and closed at 17,019.88. The unstoppable artificial intelligence force — Nvidia NVDA — was behind the fresh gains. But this time, it wasn’t thanks to its own efforts.
- Elon Musk’s AI startup xAI said it had raised $6 billion in private funding and will use the dry powder to build up its own advanced AI systems that rival OpenAI’s ChatGPT. The news sent investors scrambling to get their hands on more Nvidia shares, assuming that Musk’s xAI will become a loyal Nvidia client. The chip giant’s stock pumped by 7% on the day to a new record of $1,139.01 a pop.
- In other market corners, the S&P 500 barely made it to green with a modest 0.1% rise. The Dow Jones Industrial Average flopped as bond yields rose, weighing on the broad market sentiment. The yield on the benchmark 10-year note rose to 4.542% from Friday’s 4.471%. Rising yields happen when bond prices fall and they can trigger panic among investors because they lift borrowing costs across the economy.