On the 27th (local time), at the New York Stock Exchange, the large-cap-focused Standard & Poor's (S&P) 500 index and the tech-heavy Nasdaq once again broke a record high.
The S&P 500 and Nasdaq rose 0.1% and 0.2%, respectively, from the previous trading day to close higher. It means the share prices of the 500 leading U.S. large corporations and cutting-edge tech corporations heated up that much. In contrast, the Dow Jones 30 Industrial Average, which groups 30 traditional blue-chip corporations, fell 63 points (0.1%) to finish the session.
The undisputed top driver of the New York market's gains that day was Nvidia. Nvidia, which dominates the global AI chip market, jumped 4% in a single day. Its market capitalization, a gauge of corporate value, surpassed $5.2 trillion to hit a record high. That is an enormous size well above Alphabet, Google's parent, which closed up 1.7%.
According to financial data firm FactSet, the net profit margin of S&P 500 constituent corporations that have released first-quarter results so far is on track to hit a 15-year record high. Michael Logen, chief investment officer at U.S. asset manager Angeles Investment, said the absolute force that moves the stock market is ultimately corporate profits. Logen emphasized that all other variables are merely secondary issues.
The stock market is cheering more for the fact that corporations are generating ample cash than worrying about the geopolitical crisis of the Iran war. Bank of America's analysis found that more than 70% of S&P 500 corporations that released results this month mentioned U.S.-Iran tensions or oil issues as concerns. As tensions in the Middle East tightened, the New York market wobbled sharply at the end of February. But investors quickly overcame the fear. In April alone, the S&P 500 jumped 9.9%. It is the highest monthly gain since Nov. 2020.
By contrast, shares of consumer goods corporations that rely directly on ordinary consumers' wallets posted dismal scorecards. Domino's Pizza, the leading U.S. pizza delivery brand, plunged a hefty 8.8% on the day. It was the lowest close since 2023. The shock from management lowering this year's U.S. same-store sales growth outlook and releasing that first-quarter sales also slowed was fully reflected. Domino's explained the slump by saying that as overall consumer sentiment worsened and gasoline prices rose, cash-strapped customers began to cut expenditure.
Other consumer goods corporations are in similar shape. Dollar Tree, a discount chain that sells household goods cheaply, slid 5.5%. Ulta Beauty, a major cosmetics retailer, fell 3.4%, and Yum Brands, which operates well-known dining brands such as Taco Bell, also dropped 3.2%. Corporations that sell food, apparel and cleaning supplies are concerned that low-income consumers are suppressing the scale of expenditure due to rising energy expenses and a stagnant job market.
After President Donald Trump said he would not send a U.S. special envoy to Pakistan for peace talks with Iran, international oil prices have continued on an upward curve. Brent crude, the global benchmark, rose 2.8% to settle at $108.23 a barrel in the transaction. The war between the United States and Iran is paralyzing the global energy supply chain, pushing up gasoline prices at the pump.
Despite the uncertain real-economy backdrop, market attention is focused on this week's scheduled earnings releases by the tech giants. On the 29th, big tech corporations that sway industries worldwide—Alphabet, Microsoft, Amazon.com and Meta—will unveil their report cards. For investors betting again on the potential growth of the AI industry, these corporations' results are expected to be a key gauge that will determine the market's overall direction. Shares of other chip corporations such as Broadcom and AMD, which had been on a historic surge recently, fell together that day, taking a breather.