US stocks fall despite Nvidia boost as inflation concerns weigh
Nvidia fueled a surge in its shares, but that was overshadowed by economic data showing inflation was still a concern that could delay any Federal Reserve rate cuts.
Nvidia shares jumped 9.32% to close above the $1,000 per share mark for the first time and helped boost the Nasdaq and S&P 500 to intraday records in the early stages of trading after the AI chip company forecast quarterly revenue above estimates and announced a stock split.
But stocks lost ground after economic data showed U.S. price pressures increased in May even as business activity accelerated and as lower weekly jobless claims indicated the labor market remains on firm footing.
«It maybe speaks to the fact that people are now positioned for disappointing growth data, slower inflation data, rate cuts, and this morning… it caught people wrong footed,» said Brian Nick Senior Investment Strategist at The Macro Institute in New York.
«Anything that looks like good news is still being greeted as bad news, which shows we're still in this sort of Fed relief rally period where the market's generally happy that interest rates have stopped going up, but the worst thing would be for interest rates to continue going up at this point.»
The Dow Jones Industrial Average fell 605.78 points, or 1.53%, to 39,065.26, the S&P 500 lost 39.17 points, or 0.74%, to 5,267.84 and the Nasdaq Composite lost 65.51 points, or 0.39%, to 16,736.03.
Treasury yields moved higher after the data, which weighed heavily on small cap stocks, as the Russell 2000 dropped 1.6%, its
