New York stocks ultimately succeeded in rebounding on Wednesday after a day of fluctuations.
Following the conclusion of a two-day Federal Open Market Committee (FOMC) meeting, Fed Chair Jerome Powell made it clear that there would be no interest rate cuts for the time being. However, investors turned bullish in the final hours of trading.
Semiconductor stocks, led by NVIDIA, saw significant gains towards the end of the session.
Reports that the Trump administration would allow AI semiconductor exports to China starting May 15 gave semiconductor stocks a boost.
Markets Rebound After Three-Day Slide
The Dow Jones Industrial Average continued its upward trend due to the Disney effect. However, the Nasdaq struggled and the S&P 500 fluctuated throughout the day.
However, as the S&P 500 solidified its upward trend and the Nasdaq staged a comeback, the three major indices broke away from the two-day losing streak.
The Dow closed up 284.97 points (0.70%) at 41,113.97, the S&P 500 gained 24.37 points (0.43%) to finish at 5,361.28, and the Nasdaq added 48.50 points (0.27%) to end at 17,738.16.
NVIDIA Surges on China Export News
AI semiconductor stocks, including NVIDIA, AMD, and Intel Corporation, rallied late in the session.
The surge followed reports that the Trump administration decided to ease the AI Diffusion rules, allowing these semiconductors to be exported to China and other adversarial nations starting May 15.
NVIDIA CEO Jensen Huang had previously warned that abandoning the Chinese AI market would result in an enormous loss.
Buoyed by export resumption hopes, NVIDIA’s stock jumped 3.52 USD (3.10%) to 117.06 USD.
AMD climbed 1.74 USD (1.76%) to 100.60 USD, while Intel Corporation closed up 0.37 USD (1.86%) at 20.31 USD.
Disney Skyrockets
Walt Disney shares soared nearly 11%.
This came as Disney announced better-than-expected quarterly earnings in the morning and plans for its seventh theme park in the afternoon.
Disney revealed that the new theme park would be built on Dubai’s Yas Island, funded by Miral, a company headquartered in Dubai, United Arab Emirates (UAE).
Under the agreement, Disney’s Imagineers will oversee park design and project operations, receiving royalties in return.
The theme park will be entirely developed and financed by the local company, Miral.
Investors cheered the low-risk, royalty-based investment strategy.
Disney stock surged 9.92 USD (10.76%) to 102.09 USD.
EV Stocks Take a Hit
Electric vehicle stocks such as Rivian and Lucid fell sharply.
Disappointing earnings reports triggered the sell-off.
Rivian’s Q1 revenue of 1.2 billion USD and net profit of 206 million USD exceeded market expectations, but the company lowered its annual delivery forecast from 46,000-51,000 to 40,000-46,000 vehicles, sending shares tumbling.
Lucid’s quarterly revenue of 235 million USD fell short of the expected 247.6 million USD, despite narrowing losses.
Rivian plunged 0.78 USD (5.78%) to 12.72 USD, while Lucid dropped 0.08 USD (3.43%) to 2.25 USD.
Tesla initially struggled due to the sector’s poor performance but managed to recover, closing up 0.87 USD (0.32%) at 276.22 USD.
Alphabet and Apple Stumble
Both Alphabet and Apple saw their shares decline.
Testimony given by an Apple vice president in the lawsuit filed against Alphabet by the U.S. Department of Justice dragged down both companies’ share prices simultaneously.
Eddy Cue, Apple’s Senior Vice President of Services, testified that Google searches on Safari decreased for the first time ever.
He noted that AI startups like ChatGPT, Perplexity, and Anthropic are eroding Google’s search market share.
This revelation sent Alphabet’s stock plummeting 11.85 USD (7.26%) to 151.38 USD.
Apple’s stock also fell after testimony revealed it received up to 20 billion USD in fees from Google in 2022 alone.
Apple closed down 2.26 USD (1.14%) at 196.25 USD.
Apple collects billions of dollars in annual fees from Alphabet for selecting Google as the default search engine on Safari.
