Nvidia closed Wednesday as the strongest stock on the board, rising 4% and hitting a new all-time high, while the rest of the market barely moved.
This came as the S&P 500 edged up by just 0.08%, the Nasdaq Composite gained 0.2%, and the Dow Jones dropped 99 points. Nvidia’s performance followed weeks of solid momentum since its May 28 earnings, which beat Wall Street forecasts.
Since that report, Nvidia’s shares have jumped over 12%, leaving the S&P 500’s 3.6% gain in the same period far behind. The stock’s rise came even as the company continued facing new US restrictions on chip exports to China, one of its biggest buyers.
The strong movement in Nvidia shares was driven by growing investor confidence. Analysts pointed to the company’s dominance in AI chips as a reason for the bullish sentiment.
On Wednesday, Ananda Baruah, an analyst at Loop Capital, raised his price target for Nvidia to $250, which is currently the highest on Wall Street. In a note to clients, Baruah wrote:
“While it may seem fantastic that NVDA fundamentals can continue to amplify from current levels, we remind folks that NVDA remains essentially a monopoly for critical tech, and that it has pricing (and margin) power.”
He also said the AI chip market could hit $2 trillion by 2028. If Nvidia reaches that $250 level, the company’s market cap would be around $6 trillion, up from the current $3.6 trillion.
Wall Street eyes record highs as global tensions cool
The market as a whole hovered near record territory on Wednesday. The S&P 500 traded less than 1% below its intraday high of 6,147.43, which was hit on February 19, and stayed close to its all-time closing high of 6,144.15.
The Nasdaq also remained 1.3% under its December peak. According to CNBC, this week’s market strength has come partly from the Middle East ceasefire between Iran and Israel, which was announced after a softer-than-expected response from Iran to US strikes.
Donald Trump, now back in the White House, confirmed the truce, easing worries that the conflict might threaten global oil supply. The S&P 500 has risen more than 2% this week following those developments.
But the peace didn’t come without tension. The ceasefire, which started on Tuesday, was shaky from the beginning. Just hours after it was declared, both Israel and Iran accused each other of violating the terms. Still, investors appeared relieved that no major escalation followed.
Earlier this year, fears of rising US tariffs had pushed the S&P 500 almost 20% below its peak, with many expecting a global slowdown. However, recent labor and inflation figures have kept those concerns in check, and some traders are betting the Fed might eventually step in with support.
Tech sector lags despite headline highs
Even with Nvidia’s climb, the rest of the tech sector isn’t celebrating. Speaking to CNBC, Worth Charting CEO Worth said the rally is “so thin in terms of a few big names.” He added:
“The interesting thing is this, if you were to look at where the sector is now and you referred to it as an all time high, in relation to the February 18th market peak, we know that it is broken out and made a new high. On a relative basis, despite this, tech is actually underperforming the market, on a trailing 12 month basis, albeit barely, but that is the case.”
Worth also pointed out that only 5 out of 69 tech stocks are up since February 18. The median stock is down 5.5%, and the average stock is down 7%, even though the overall sector is reaching new levels. Despite that, the tech sector is still up 5.7% this year and has rallied 14.5% over the past three months, thanks mostly to excitement over AI.
Away from tech, investors also looked at new home sales data, which came in at the lowest level since October 2024. That didn’t move markets much, but it did add another layer of caution.
At the same time, Federal Reserve Chair Jerome Powell returned to Capitol Hill for a second day of testimony. Speaking to the Senate Banking Committee, Powell said:
“It’s a risk. We feel like, as the people who are supposed to keep stable prices for the benefit of the American people, we can manage that risk too. That’s all we’re doing. We’re not deciding what to do yet.”
Powell, who also testified on Tuesday before the House Financial Services Committee, refused to say when the Fed might cut rates, even though Trump has been openly demanding it.
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