In Markets "In a Nutshell"

Markets “In a Nutshell” for May 30, 2023

Investment Week at a Glance

Stocks finished mixed for the week.  The Dow Jones Industrial Average fell 1.00%, the S&P 500 was up 0.3%, and the NASDAQ rose 2.50%. Foreign stocks (MSCI EAFE) were down, falling 2.9%. Bond prices were down for the week, with the 10-year U.S. Treasury ending the week at 3.80%.  (Data source: Wall Street Journal)

Debt Ceiling Deal Reached

Over the Memorial Day weekend, President Biden and Speaker McCarthy reached a deal to suspend the debt ceiling until 2025. Although the deal still has to get through Congress, many believe it will with both leaders on each side coming to an agreement. This allows the market to take a sigh of relief as the worries of the US defaulting on its debt can go away for the time being. Although this is typically what happens as a deal is struck right at the end, it still leads to worry for investors as the US has never defaulted and the impact on the World economy is unknown if the US did default. This deal will keep the non-defense budget flat next year and a 1% increase in 2025, defense spending will increase by 3% next year. This deal will give the market one less worry for now but will most likely come up again in 2025 and the same discussions will take place.

Tech Continues to Drive Markets Higher

Despite 8 of the 11 S&P 500 sectors being negative for the year, the S&P 500 is still up over 8%. The main reason for this is because of Tech and Communication Services are up over 30% for the year, leading the market higher despite recession worries. Investors are moving into these sectors as the excitement around AI ramps up and some analysts expect this to be just the beginning of the AI growth cycle. Last week NVIDIA took the market by storm as the stock soared after it raised revenue guidance due to AI. The stock has been one of the largest winners of the year up nearly 200% as it crossed the $1 trillion market cap on Monday morning. NVIDIA is now the 5th largest company American company by market cap and continues to rise in value. When the large mega-cap companies perform well, the market tends to follow which has been the reason for the overall market being higher for the year.



How many U.S. companies have over a $1 trillion market cap? (Scroll Down for Answer)

  1.    3
  2.    5
  3.    7
  4.    9












































Answer below.



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2.   5.  NVIDIA is the 5th U.S. company to surpass the $1 trillion mark currently. The other 4 are Apple, Microsoft, Alphabet (Google), & Amazon.