Nvidia Stock Boosted by Elon Musk’s xAI Venture

Major U.S. equities indexes were mixed to open the shortened trading week following the Memorial Day holiday.

Data from the Conference Board released on Tuesday showed an unexpected uptick in consumer sentiment in May, driven by labor market strength and a decline in food prices.

Meanwhile, Minneapolis Federal Reserve President Neel Kashkari became the latest central bank official to confirm that interest rates may remain elevated for an indefinite period until inflation is demonstrably under control. Inflation watchers will have their eyes on the Personal Consumption Expenditure (PCE) report set to be released on Friday for signs that price pressure is waning.

The S&P 500 fluctuated around the flatline for much of the session before ending the day little changed, edging out a minimal gain of less than 0.1%. The tech-heavy Nasdaq jumped 0.6% to print a record high and notch its first-ever close above the 17,000-point level. The Dow dropped 0.6% on the day.

Nvidia (NVDA) shares notched the top daily performance in the S&P 500, jumping 7.0% to an all-time high. The semiconductor behemoth attracted headlines last week by blowing past quarterly sales and profit estimates, reigniting enthusiasm around its massive artificial intelligence (AI) opportunity. Moreover, Elon Musk said Tuesday that his xAI startup will integrate Nvidia’s chip technology into its supercomputer.

Shares of Ralph Lauren (RL) advanced 4.5%, continuing their strong performance since the apparel company reported earnings results last week. In addition to naming a new chief financial officer (CFO), the company said it expects an uptick in gross margins, supported by lower cotton costs.

Deckers Outdoor (DECK) shares were up 4.5%, extending gains posted Friday after the footwear maker reported better-than-expected quarterly sales and profits. Demand for its Uggs and Hoka shoe brands helped drive the strong performance.

Shares of Texas-based power generator Vistra (VST) added 4.0%. Along with other utilities and energy technology firms, Vistra has recently garnered optimism around its opportunity to fulfill the high energy demand needed to power AI applications.

Moderna (MRNA) shares suffered the heaviest losses of any S&P 500 stock, plunging 8.0%. The decline could represent profit-taking by investors after the stock popped around 40% higher over 10 consecutive positive trading sessions. Even after Tuesday’s downtick, Moderna shares remain up more than 35% year-to-date amid optimism about artificial intelligence (AI) developments, the possibility of a spike in COVID-19 infections, and concerns about the spread of avian flu.

Shares of construction materials supplier Builders FirstSource (BLDR) slid 4.8%. Earlier this month, the company posted lower-than-expected quarterly profits, dragged by lower gross profit margins. The likelihood that interest rates could remain higher for a more extended period could be weighing on the stock, as higher mortgage rates reduce affordability and restrain residential construction activity.

Shares of Marketaxess Holdings (MKTX), which operates a trading platform for fixed-income securities, fell 4.9%. Although increased volatility in the bond market and elevated credit spreads could help drive strong performance, the company missed revenue estimates in its most recent quarterly report, driven by a decrease in U.S. high-yield commission revenue.