Unexpectedly Intriguing!
26 February 2024
An artificial intelligence computer chip with the letters NVDA in the middle. Image generated with Microsoft Bing Image Generator.

The S&P 500 (Index: SPX) rose over 1.6% during the trading week ending on Friday, 23 February 2024. The index closed out the week at 5,088.80, a new record high.

It was a trading week when there was really only one big stock market story. Shares of Artificial Intelligence (AI) capable computer chip maker Nvidia (Nasdaq: NVDA) surged on Thursday, 22 February 2024, rising 16.4% above it's previous day's close to reach $785.38 per share as the company reported blowout earnings and boosted its business outlook.

On Friday, 23 February 2024, the company was knocking on the door of a $2 trillion market capitalization, surging past online retailing giant Amazon (NASDAQ: AMZN) and joining Microsoft (NASDAQ: MSFT) and Apple (NASDAQ: AAPL) in that accomplishment. Together, the S&P 500's big three components of MSFT, AAPL, and NVDA represent over one-sixth of the total value of the index.

Since NVDA is a component of the S&P 500, its surging share price prompted the entire index to rise by 2.1% on Thursday, 22 February 2024. As our longtime readers know, any daily change of 2% or more qualifies as an "interesting" day for the stock market.

The following update to the alternative futures chart shows how this action affected the trajectory of the S&P 500 during the week that was.

Alternative Futures - S&P 500 - 2024Q1 - Standard Model (m=+1.5 from 9 March 2023) - Snapshot on 23 Feb 2024

Even with Nvidia's blowout earnings report, investors remain focused on the second quarter of 2024 in setting the trajectory of the S&P 500. We find it running near the upper end of the redzone forecast range we've added to account for the past volatility of stock prices the dividend futures-based model uses as base reference points for projecting the index' potential future trajectories. The new redzone forecast range will run through the end of March 2024.

There was more stuff that happened to shape the future expectations of investors during the past week, which reinforces this observation. Here are the Presidents Day holiday-shortened trading week's market moving headlines.

Tuesday, 20 February 2024
Wednesday, 21 February 2024
Thursday, 22 February 2024
Friday, 23 February 2024

The CME Group's FedWatch Tool projects the Fed will hold the Federal Funds Rate steady in a target range of 5.25-5.50% until 12 June 2024 (2024-Q2), unchanged from last week.

Meanwhile, the Atlanta Fed's GDPNow tool's latest estimate of real GDP growth for the first quarter of 2024 (2024-Q1) remains at +2.9%, as its next update will be on 27 February 2024.

Image credit: Microsoft Bing Image Creator. Prompt: "An artificial intelligence computer chip with the letters NVDA in the middle."

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