US equities fell Friday, but raced through a dizzying week of record-breaking, fueled by AI chipmaker Nvidia’s (NVDA) blockbuster profits.
The S&P 500 (^GSPC) closed at a new high, while the Dow Jones Industrial Average (^DJI) gained 0.2%, or around 60 points, setting a new record. The Nasdaq Composite (^IXIC) fell 0.3% following a strong week.
Investors appeared to catch their breath following a global breakout that increased Nvidia’s market value by almost $277 billion, marking the largest single-day gain in Wall Street history. The chipmaker’s stock continued to surge Friday, bringing the company’s capitalization close to $2 trillion.
Aside from the AI mania, the market is refocusing on the possibility of a US interest rate decrease. A procession of Federal Reserve officials emphasised that cutbacks are coming, but not soon — though they disagreed on when the change may begin.
Read more about what the Fed rate decision implies for bank accounts, CDs, loans, and credit cards.
A strong fourth-quarter earnings season is winding down, with more than one-third of reports exceeding expectations. Block’s (SQ) strong profits prediction prompted a 16% increase in the fintech’s shares, while Carvana’s (CVNA) stock soared around 30% as investors celebrated the used-car seller’s first annual profit.
A new GDP report will help Fed policymakers as they continue to assess economic data in preparation for the first round of rate reduction, but the timing is still unknown. Federal Reserve officials have stated such cutbacks are on the way, but recent comments have dampened expectations.
Investors and policymakers will also be looking at the most recent consumer confidence data, as well as updated readings on personal consumption and income.
The following days will provide new insight into the housing industry, with new statistics on mortgage applications and new house sales shaping how 2024 will evolve.
Walmart (WMT) announced plans this week to expand its ad business through a $2.3 billion acquisition of smart TV maker Vizio, which will provide Walmart and advertisers with in-home tools “to connect to customers” (surveillance?) as well as another surface for boosting e-commerce.
The Vizio acquisition complements Walmart’s aggressive advertising strategy. Insider Intelligence predicts that the retailer’s advertising income will increase by roughly 40% this year. This is more than any other firm.
Others in the grocery and retail space seeking the higher margins of digital ads — Instacart (CART), Target (TGT), and, you guessed it, Amazon (AMZN) — are expected to significantly increase their ad sales in 2024, transforming their online platforms into another system for steering user attention and money. It’s a logical progression for these organisations, which have also grown into strong search engines, hosts of user-generated material (reviews! usernames!) and content creators over time.
Other indicators of the market’s respect for Big Tech and readiness to transform traditional and digital businesses into ad portals have emerged. Next week, Amazon, the third-largest player in digital advertising behind Google (GOOG, GOOGL) and Meta (META), will enter the Dow Jones Industrial Average.
“Reflecting the evolving nature of the American economy, this change will increase consumer retail exposure as well as other business areas in the DJIA,” stated S&P Dow Jones Indices, which oversees the 30-stock index. Or, as S&P analyst Howard Silverblatt frankly stated on Yahoo Finance Live, the index included Amazon because it “needs to stay relevant.”
Amazon is becoming an ad tech behemoth, while the country’s largest retailer is transforming itself into a technology corporation. “Digital advertising is the future of Walmart,” said Oliver Chen, a senior research analyst at TD Cowen, on Yahoo Finance Live.
And, while it may appear absurd at first look, owning the shop and billboards is just another method for a corporation to benefit from vertical integration. Or, in this case, displays that serve as both.