Nvidia Rebound Drives Nasdaq Higher

A bounce in Nvidia shares pushed the tech-heavy Nasdaq Composite higher, snapping a three-session streak of declines.

The Nasdaq added 1.3%. The S&P 500 rose 0.4%. The Dow Jones Industrial Average lost 0.8%.

The moves Tuesday continued a topsy-turvy stretch for major indexes, in which the Nasdaq and blue-chip Dow have headed in opposite directions. Such divergence isn’t unheard of, but it signals that investors are shuffling their bets.

The two indexes have moved in different directions in eight out of the past 10 trading days, something that hasn’t happened since a 10-day stretch ending in April 1995, according to Dow Jones Market Data.

Driving much of the action: Nvidia, which isn’t included in the Dow. The artificial-intelligence chip-making giant briefly became the world’s most valuable listed company last week, then tumbled into correction territory to kick off the week. Tuesday, Nvidia shares bounced 6.8% after shedding around $430 billion in market cap within just days.

It isn’t just the major indexes moving in different directions. Individual shares within the S&P 500 have been sharply diverging, driving correlation among stocks in the index to some of the lowest levels of the past two decades, according to Bank of America.

In corporate news, Carnival reported adjusted quarterly earnings of 11 cents a share, surprising analysts who had expected a small loss. The cruise company’s stock jumped 8.7%, its sixth session of gains.

Airbus shares sank 9.4% after the plane maker said that new production challenges would prevent it from hitting profit targets. The European company told investors late Monday that it would miss this year’s annual delivery target after disclosing new delays and hiccups in its supply chain.

Many investors have also been taking a closer look at economic data trickling in, on edge that the strong run for the jobs market and broader economy may be turning a corner.

Fresh data on Tuesday showed that U.S. consumers grew a little less confident this month.

The Conference Board said its consumer-confidence index slipped to 100.4, from last month’s 101.3.

“There are definite pockets of weakness in the economy,” said Rick de los Reyes, a portfolio manager at T. Rowe Price.

In other assets, the yield on the 10-year Treasury note fell to 4.237% from 4.248% on Monday. Brent crude futures lost 1.2% to $85.01 a barrel, the biggest one-day decline since early June.

Parag Thatte, a strategist at Deutsche Bank, said that some of his clients appear reluctant to jump into the S&P 500 after its nearly 15% rally in the first half of 2024.

“There’s still a lot of skepticism out there,” Thatte said. “If you’re in tech, you’re happy. Anybody outside that has not enjoyed the strong run just yet.”

The big question for many investors is whether the U.S. economy is barreling toward the end of its impressive recovery since the depths of the Covid-19 pandemic. Thatte said the economy still has legs, and the gains enjoyed by technology giants could extend to other corners of the markets.

“We think the cycle can go on for a while,” Thatte said, especially if higher productivity boosts economic growth in coming months.

Chelsea Dulaney and Benjamin Katz contributed to this article.

Write to Gunjan Banerji at [email protected]