In This Story
The S&P 500 and the Nasdaq both reached all-time highs for the stock indexes on Wednesday, as new data showed inflation slowing slightly and in line with expectations.
Meanwhile, the Dow Jones Industrial Average was inching closer to the 40,000 mark for the first time ever, which it approached but ended up missing in March.
The Consumer Price Index, a key inflation gauge, rose 3.4% in April compared to a year earlier, according to Bureau of Labor Statistics data released early Wednesday. Prices rose by 0.3% in April compared to a 0.4% increase in March. Core prices, which exclude food and energy, rose 3.6% annually, the lowest increase since April 2021.
The inflation report comes a day after the Producer Price Index, a measure of wholesale inflation, increased more than expected in April at 0.5%. On a 12-month basis, the index increased 2.2%.
The latest CPI data has renewed investors’ hopes that the Federal Reserve will cut interest rates this year.
The Dow rose 349 points, or about 0.88%, to 39,908 as the market closed. Both the S&P 500 and Nasdaq hit all-time highs, gaining 1.1% and 1.4%, respectively, to 5,308 and 16,742.
All eyes on Nvidia earnings
Nvidia’s quarterly earnings report is due next Wednesday, and investors are watching the AI chipmaker’s stock. The shares were up 3.5% as the market closed.
Nvidia’s stock price has risen more than 200% in the last year. Nvidia exceeded analysts’ earnings expectations in February, reporting revenues of $22 billion in its fourth quarter — up almost 270% from the previous year. The chipmaker’s highly desired H100 GPUs, or graphics processing units, have propelled the company to success amid a race to develop powerful generative AI models. And Nvidia became the first chipmaker to reach a $2 trillion valuation in February. The company counts Microsoft and Meta as its top customers.
Super Micro Computer gains over 15%
Wall Street couldn’t be more bullish on the Super Micro Computer stock as the AI hardware manufacturer is reportedly thinking of spilting stock for the first time. The stock was up 15.8%, trading at $952 by closing time.
Barclays recently upgraded Super Micro Computer stock price target after seeing its revenue growth, supply chain improvements, and the booming growth of artificial intelligence (AI).
GameStop and AMC are down after hitting the rally
Shares of GameStop and AMC, both meme stocks that have been boosted this week by the online return of investor “Roaring Kitty,” fell sharply Wednesday morning, as some of the excitement already seems to have abated.
GameStop stock was down 18% as the day ended, while AMC stock dropped 20%.
Other meme stocks are also down
Other meme stocks that rallied a day earlier followed the downward trend on Wednesday. Blackberry, the maker of the darling smartphone of the 2000s, was down 7% by closing time. The stock had jumped 14% on Tuesday.
Virgin Galactic, a pioneer in space tourism and travel, soared more than 33% Tuesday morning but had dropped over 16% as the day ended. And headphone manufacturer Koss, which was one of the major meme stocks of 2021, rallied 35% on Tuesday but was down 19% by closing time.
Memecoins didn’t join the meme stock part
The price of Bitcoin and memecoins, such as Dogecoin and Shiba Inu, did not rise significantly after the meme stock rally. On Wednesday afternoon, Dogecoin and Shiba Inu both were up 4% and 3%, respectively, while the top cryptocurrency Bitcoin was up over 7%.
That’s because crypto has evolved and become more macro, said Pat Doyle, a blockchain researcher at Amberdata, in an email.
The recent meme stock rally wasn’t expected to last long the way it did in 2021, as mentioned by some experts. Doyle echoed the same sentiment by saying that 2021 had many catalysts, including covid, remote work, online time being increased, and stimulus checks being issued, among others, and none of them are happening in 2024.
— Laura Bratton and Rocio Fabbro contributed to this article.