Share this article without paywall.
NEW YORK Wall Street’s frenzy over artificial intelligence helped push the stock market higher on Thursday, even as concerns mount over political rancor in Washington.
The S&P 500 rebounded 0.9% after chipmaker Nvidia gave a monster forecast for upcoming sales as it benefits from the tech world’s rush to AI. That helped the Nasdaq composite jump 1.7%, while the Dow Jones Industrial Average slipped 35 points, or 0.1%.
Traders work on the floor of the New York Stock Exchange in New York on May 25.
Seth Wenig, Associated Press
Because it is one of Wall Street’s most valuable stocks, Nvidia’s 24.4% rise was the strongest force pushing up on the S&P 500. Its forecast of around $11 billion in revenue for the current quarter beat analysts’ expectations for less than $7.2 billion. Nvidia stock has already more than doubled this year and its total value is approaching $1 trillion.
Shares of other chipmakers also rose after Nvidia described a race by its customers to embed AI into every product, service and business process. Advanced Micro Devices gained 11.2%.
People also read…
Some Big Tech stocks rallied, adding to recent gains fueled by AI enthusiasm. The field has become so hot that critics are warning of a possible bubble, while proponents say it could be the last revolution to reshape the global economy. Microsoft gained 3.8% and Google’s parent company Alphabet rose 2.1%.
They helped lift the indexes even as the majority of stocks fell on fears the US government was closing in on a possible debt default. Washington could run out of cash to pay its bills as early as June 1, unless Congress allows it to borrow more.
In total, the S&P 500 rose 36.04 points to 4,151.28. The Dow slipped 35.27 to 32,764.65 and the Nasdaq gained 213.93 to 12,698.09.
In the bond market, yields rallied after reports suggested the economy was doing better than expected.
One said fewer workers applied for unemployment benefits last week than expected. It’s a signal that the labor market remains remarkably strong, even as manufacturing and other sectors of the economy slow under the weight of much higher interest rates.
Another report estimated that the US economy grew at an annual rate of 1.3% in the first three months of the year, stronger than the 1.1% previously forecast.
Stock markets overseas were mostly weaker, but the declines were more subdued than in previous days.
Germany’s DAX lost 0.3% after data showed its economy contracted in the first three months of the year, the second quarter in a row.
Hong Kongs Hang Seng fell 1.9% amid concerns China’s economic recovery after the government eased pandemic restrictions is faltering. Shanghai shares fell 0.1%.
Rich young Americans have lost faith in the stock market and are instead betting on these 3 assets
Rich young Americans have lost faith in the stock market and are instead betting on these 3 assets
The stock market has long been the go-to choice for people looking to invest their money. But that could be about to change as a younger generation enters the scene.
According to a recent Bank of America survey, people between the ages of 21 and 42 with at least $3 million in assets only have 25% of their portfolio invested in stocks. For high net worth investors over 43, the equity allocation is much higher at 55%.
Recent market volatility may have something to do with the decisions of these millennials.
“We’ve had a very strong run in the stock market over the past decade and are now in volatile times. That’s on people’s minds,” said Jeff Busconi, chief operating officer at Bank of America. Private Bank, in an interview.
Despite the stock market’s recent rebound, the benchmark S&P 500 index is still down about 9% from a year ago.
Busconi adds that the younger generation of investors increasingly believe that “a traditional portfolio of stocks and bonds will not produce above-average returns over time.”
Cloth
Real estate
Real estate has been a popular asset class lately, perhaps because it’s a well-known inflation hedge.
As the price of raw materials and labor rises, new properties cost more to build. And that drives up the price of existing real estate.
Well-chosen properties can provide more than just price appreciation. Investors also get to earn a steady stream of rental income.
It’s no surprise that high net worth individuals, regardless of age, see an opportunity in this asset.
In the Bank of America survey, 28% of young people said real estate has great potential for growth; 31% of the older group have the same opinion.
But you don’t have to be a homeowner to start investing in real estate. There are many real estate investment trusts (REITs) as well as crowdfunding platforms that can help you become a real estate tycoon.
Cloth
Cryptocurrency
Once considered a niche asset, cryptocurrency has now entered the mainstream. A CFA Institute study earlier this year showed that 94% of state and government pension plans have invested in cryptocurrencies.
Of course, many investors have learned about cryptocurrency volatility the hard way from this year’s massive pullback. But some wealthy millennials still believe in the asset class.
In the Bank of America survey, 29% of young people said crypto offers great opportunities for growth, while only 7% of the older group agreed.
Unsurprisingly, younger people are also much more exposed to crypto (average allocation of 15% of their portfolio) than the older generation (average allocation of 2% of their portfolio).
Getting in on the action is easy, there are plenty of platforms that allow you to invest in crypto. Just be aware of the fees: many exchanges charge up to 4% commission fees just for buying and selling crypto. But a few investment apps charge 0%.
Cloth
Capital investment
Private equity refers to investments in companies that are not publicly traded.
A private equity fund takes money from fund investors, invests the money in companies usually by taking controlling stakes, and works with companies’ management teams to make their companies more valuable. The goal is to sell their portfolio companies later, hopefully for a decent profit.
Although private equity funds are generally not open to small investors, they are growing in popularity among the wealthy.
In 2021, private equity buyouts doubled from 2020 to $1.1 trillion, according to Bain & Company.
This investment class has also caught the attention of wealthy millennials.
The Bank of America survey suggested that 25% of people aged 21-42 with at least $3 million in assets identified private equity as one of the biggest opportunities for growth, compared to 15% for older people.
This story originally appeared on Moneywise and has been independently reviewed to meet journalistic standards.
Cloth
