Stocks rose on Tuesday as the Federal Reserve began its two-day policy meeting, with the Dow Jones Industrial Average gaining 240 points, marking its best day since February. The S&P 500 climbed 0.4% and the Nasdaq Composite rose 0.1%. Investors are closely watching the central bank’s decision, as recent inflation reports have raised concerns that interest rates may remain higher for longer than anticipated.
Treasury yields fell, benefiting stocks, with the 10-year Treasury yield down 3 basis points at 4.312%. Chip giant Nvidia saw a 0.6% increase after CEO Jensen Huang introduced the company’s latest AI chip, Blackwell, at its GTC Conference. Super Micro Computer, a primary vendor for Nvidia’s AI servers, experienced a 9.5% drop due to a share offering announcement.
A potential slowdown in the recent market rally was evidenced by MicroStrategy’s more than 8% decrease, despite its significant growth in 2024. Chief investment strategist at CFRA Research, Sam Stovall, believes that the current decline is just a minor adjustment in response to recent gains and that the AI revolution still has room for growth. Traders are advised to be prepared for either a delayed or deeper market correction than expected.