Intel Stock Soars 50% on NVIDIA's $50 Billion Investment

On the evening of September 18, U.S. stocks opened higher. As the Federal Reserve cut interest rates and hinted at further reductions, investors shifted their focus back to favored tech stocks. Intel's stock surged following the announcement of a $50 billion investment commitment.

Intel's stock price soared after NVIDIA announced a $50 billion investment in the chip manufacturer to jointly develop data center and PC products. Other tech stocks, including Broadcom, Palantir, and Tesla, also saw significant gains.

In contrast, AMD's stock price fell by 5%. The previous day, U.S. stocks experienced significant volatility as the Federal Reserve, as expected, lowered its benchmark interest rate by 0.25 percentage points. The Dow Jones Industrial Average closed up approximately 0.6%, while the S&P 500 and Nasdaq Composite indices ended the day lower.

During the post-policy decision press conference, Federal Reserve Chairman Jerome Powell dampened investor hopes by describing the rate cut as a "risk management" measure and suggesting that the central bank would not embark on a prolonged rate-cutting path this year. Federal Reserve policymakers anticipate two more rate cuts this year, but only one in 2026, while traders had previously priced in two to three cuts for next year.

Despite the decline on Wednesday, the S&P 500 and Nasdaq indices are poised to record weekly gains, rising 0.2% and 0.5% respectively. This would mark the sixth week of gains for the broad market index and the third consecutive week of gains for the tech-heavy Nasdaq index.

Meanwhile, the Dow Jones Industrial Average's rise on Wednesday brought its weekly gain to 0.4%, suggesting a potential second consecutive week of gains if the momentum continues.

In other central bank news, the Bank of England announced on Thursday that it would maintain interest rates and slow the pace of quantitative tightening, reducing long-term bond sales to minimize the impact on volatile bond markets. This marks the first adjustment since the Bank of England began selling bonds in 2022, following the purchase of 875 billion pounds in bonds from 2009 to 2021 to stimulate economic growth.

On the economic data front, the number of initial unemployment claims in the U.S. saw the largest decrease in nearly four years, reversing the previous week's sharp increase and aligning with the low level of layoffs in the economy. The U.S. Department of Labor reported that the number of people filing for unemployment benefits for the first time decreased by 33,000 to 231,000 for the week ending September 13. Economists surveyed had predicted a median of 240,000 claims.

The number of continuing claims also decreased to 1.92 million in the previous week. Intel's stock price surged following NVIDIA's announcement of a $50 billion investment. This boosted the performance of other semiconductor stocks as well.