IXIC: Nasdaq Composite Rallies 0.7% for New All-Time High. Nvidia Jump Powers the Leg Up.

Two AI overlords walk into a bar – one says I’ll back you with $100 billion for your build-out efforts. The result – record highs everywhere.

🤑 Nasdaq Soars on Nvidia Deal

• The Nasdaq Composite index IXIC soared to a fresh all-time high Monday after news broke that Nvidia NVDA and OpenAI have struck a big deal.
• The two AI overlords will be building out data centers. To back the effort, Nvidia is injecting $100 billion into the ChatGPT parent. Things are so intertwined now that even remotely associated companies could feel the impact (and get a lift).
• Oracle ORCL, which has a $300 billion contract with OpenAI, soared 6.3%. CoreWeave CRWV, a key AI infrastructure player, shot higher by 6.7% on the day. Taiwan Semiconductor Manufacturing 2330, which makes Nvidia chips, added almost 3%.

💥 Records. Everywhere.

• The record high session wasn’t reserved only for the tech-heavy benchmark. The 30-stock Dow Jones Industrial Average DJI added 0.1% to hit a new closing high. And the broader 500-strong S&P 500 jumped 0.4% to its own record close.
• How high is too high? Analysts have been saying for months, if not a couple years now, that the AI hype has stretched valuations thin to the point where a mean pullback could be expected.
• Yet, new things happen that show how much more room for growth there really is. Nvidia’s Monday pop shot its valuation to a formidable $4.5 trillion, a price tag never seen anywhere before.

🔥 What Else Is Happening?

• What’s the broader picture? Mostly good. The Federal Reserve’s rate cut last week unleashed fresh waves of enthusiasm among risk takers. Now, traders are hungry for more of those trims.
• Futures markets this morning were pricing in at least a 75% chance of one 25-basis-point cut at one of the Fed’s remaining two meetings this year. Not like they didn’t project it. In fact, policymakers said they expect to throw the rates on the chopping board twice by year-end.
• Quick glance across the board: gold prices XAUUSD kept pushing higher early Tuesday, chasing $3,800 per ounce. The EURUSD was stuck at $1.18, virtually moving sideways, and Bitcoin BTCUSD was reeling itself out of a weekend slump with prices floating near $113,000 per coin.