Tech Titans Propel S&P 500 to Record High as Nvidia's Bold AI Investment Sparks Optimism

The U.S. stock market reached another record high on Monday, driven by the strength of technology stocks. Nvidia's announcement of its potential investment of up to $100 billion in OpenAI boosted optimism around artificial intelligence.

Technology stocks led the S&P 500 upward, marking the benchmark index's 28th new high this year. Nvidia, the world's leading chip manufacturer, surged approximately 4% in stock value. Its investment aims to support OpenAI in building data centers, utilizing Nvidia's advanced AI chips to train and deploy OpenAI models.

Apple also experienced significant gains with its stock jumping 4.3%, closing at its highest level since December, thus turning its annual performance positive.

While Pfizer made a slight gain, aiming to catch up in the competitive weight-loss drug space by acquiring Metsera, another health-related segment saw a decrease as consumer health company Kofu fell to a record low amid reports linking an active ingredient in Tylenol to autism by Trump administration officials.

As large technology companies continue propelling U.S. stocks to historic highs, experts suggest cautious optimism. Tony Pasquariello from Goldman Sachs advised a pragmatic bullish approach, albeit expressing concerns about the current portfolio's risk/reward structure. Investors should be wary of countering the momentum of America's major tech stocks.

Meanwhile, differing opinions on economic policy emerged. Newly appointed Federal Reserve governor Stephen Milan advocated for significant rate cuts in the coming months to safeguard the labor market, discussions aligned with contrasting views from other Federal Bank leaders who cautioned against premature moves due to inflation considerations.

David Kostin, Goldman Sachs' chief equity strategist, revised the S&P 500's target prices, forecasting growth over the next year. Highlighting historical data, he noted when the Federal Reserve resumes rate cuts amid ongoing economic growth, the index's median annual return is typically 15%.

Ultimately, Monday's market performance resulted in the S&P 500 closing up 0.4%, settling at 6693.75 points. The Dow Jones Industrial Average increased by 0.1%, closing at 46381.54 points, while the Nasdaq Composite climbed 0.7% to end at 22788.98 points.