The S&P 500 Recovers All Its Nvidia-Triggered Losses
Investors are in a holiday mood, and small-caps are leading the way.
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Growing confidence about a quarter-point interest rate cut and a reshuffling of leadership in the AI sector pushed the market for the third straight day. The S&P 500 has now completely recovered the ugly reversal that was triggered by the Nvidia (NVDA) earnings report.
Investors are often in a good mood during Thanksgiving week, and there seems to be no exception this year, despite indications of economic struggle and a slowing employment picture. There are some concerns, but that is providing a wall of worry to scale, and that is added further by some fear of missing out on a year-end rally.
Small-caps were the star of the show Tuesday, and that was reflected in breadth, which was nearly 75% positive. New highs picked up to around 225 names, but were mostly in biotechnology, medical, and sectors other than technology.
There is some important inflation data due Wednesday morning that will elicit a market reaction, but volume should slow quite a bit in front of the holiday and the half-day session on Friday. Watch for speculative trading in thinner stocks.
The sour mood that was created by the negative reaction to Nvidia’s earnings has been forgotten for now, and there is growing interest in smaller stocks that should benefit from lower interest rates and less extended charts.
Inflation news could be a problem, but market players are in a good mood and not likely to be too concerned about PCE inflation data unless it is much hotter than expected.
Have a good evening. I’ll see you Wednesday.
At the time of publication, Rev Shark had no positions in any securities mentioned.
