At midday, the S&P 500 (SNPINDEX:^GSPC) inched up 0.07% to 7,585.26, the Nasdaq Composite (NASDAQINDEX:^IXIC) rose 0.23% to 27,034.50 on artificial intelligence (AI) strength. The Dow Jones Industrial Average (DJINDICES:^DJI) slipped 0.24% to 50,912.06 as oil-linked cyclicals lagged.
Market movers
Nvidia jumped more than 4% this morning, after unveiling a new AI-focused PC chip. The news helped push Dell Technologies up 8% and Microsoft up 2%, as both firms benefit from the chip. Dell also got a boost from a Morgan Stanley upgrade, as analysts more than doubled the stock’s price target.
On the other hand, Qualcomm (NASDAQ:QCOM) and Intel fell on fears of tougher PC competition. ServiceNow extended its rally with a 10% surge as investors reassessed software stocks.
What this means for investors
Markets were muted this morning as hopes for an imminent end to the U.S.-Iran war began to fade again, even as fresh announcements from Nvidia boosted mega-cap tech stocks. Mixed reports on peace talks sent oil prices soaring, pressuring consumer cyclicals and industrials.
A Bank of America strategist drew parallels between May’s record stock performance and the peak of the dot.com bubble in 2000. Although the S&P 500 reached record levels last month, just 21 stocks in the index set new highs. Similarly, in March 2000 — the height of the internet boom — 20 stocks set records, raising concerns about extreme market concentration.
For perspective, analysts have been flagging similar issues for some time, and the AI rally continues. However, investors might revisit their exposure to AI stocks and ensure that defensive stocks such as consumer staples and healthcare are also represented.
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Bank of America is an advertising partner of Motley Fool Money. Emma Newbery has positions in Nvidia. The Motley Fool has positions in and recommends Intel, Microsoft, Nvidia, Qualcomm, and ServiceNow. The Motley Fool has a disclosure policy.