Nvidia CEO's comments cause cooling system company to go bankrupt
Memory and storage chip makers hit record highs
Stock valuations are expensive ahead of earnings season
S&P 500 +0.62%, Nasdaq +0.65%, Dow +0.99%
Jan 6 (Reuters) – Wall Street ended higher on Tuesday as renewed optimism about AI sent semiconductor stocks soaring, Moderna rallied and the Dow Jones Industrial Average hit a record high.
Moderna (MRNA.O)opens a new tab BofA Global Research raised the drug company's price target, contributing to a boost in the S&P 500 Healthcare Index (.SPXHC), which rose about 11%.opens a new tab 1.96%.
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Memory and storage technology stocks rose after Nvidia CEO Jensen Huang spoke at the Consumer Electronics Show in Las Vegas and revealed details including a new layer of storage technology.
SanDisk (SNDK.O)opens a new tab Western Digital (WDC.O) soars more than 27%opens a new tab Seagate Technology (STX.O) rose 17%opens a new tab Up 14%, Micron Technology (MU.O)opens a new tab rose 10%, with all four stocks hitting record highs.
PHLX Chip Index (.SOX)opens a new tab The stock also rose 2.75% on the day, hitting a new all-time high and increasing by about 8% in the first three trading sessions of 2026.
“I think it's going to be a very strong earnings season for Big Tech companies,” said Jed Ellerbrook, portfolio manager at Argent Capital in St. Louis. “I think all the reported capex estimates will be revised upward again.”
S&P 500 constituents so far in 2026
Investors are counting on reliable economic data as the effects of a record 43-day federal government shutdown fade, with upcoming releases including jobs and separations surveys such as the December jobs report on Wednesday and Friday. A weaker-than-expected employment report could strengthen the case for the central bank to cut interest rates.
As we head into fourth-quarter earnings season in the coming weeks, Wall Street valuations remain relatively expensive. The S&P 500's forward P/E ratio is about 22 times, down from 23 times in November, but still above the index's five-year average of 19 times, according to LSEG data.
The S&P 500 rose 0.62% to close at 6,944.82 points.
The Nasdaq rose 0.65% to 23,547.17 points and the Dow Jones Industrial Average rose 0.99% to 49,462.08 points, nearing its historic 50,000 point mark.
Volume on U.S. exchanges was relatively high, with 18.7 billion shares traded compared to the past 20 trading average of 16.1 billion shares.
The S&P Global Final Composite PMI for December fell to 52.7 from 53.0 the previous month, and the Services PMI fell to 52.5 from 52.9, according to Tuesday's data.
Markets also analyzed Richmond Fed President Tom Barkin's comments in which the U.S. central bank reiterated its cautious stance on further rate cuts, in contrast to Governor Stephen Milan's call for aggressive rate cuts in an interview on Fox Business.
Investors bet that the move could pave the way for American companies to access Venezuela's oil reserves, after the U.S. military detained Venezuelan President Nicolas Maduro over the weekend, allaying concerns about broader geopolitical implications.
Oil stocks fell along with giant Exxon Mobil (XOM.N) after posting solid gains in pre-market trading.opens a new tab and Chevron (CVX.N)opens a new tab They decreased by 3.4% and 4.5%, respectively.
Nvidia's Huang's comments about the efficiency of the company's new chips raised concerns about demand for data center cooling systems. Johnson Controls (JCI.N) stockopens a new tab Trane Technologies fell 6.2%, while Trane Technologies fell 2.5%.
AIG (AIG.N)opens a new tab Shares fell 7.5% after the insurance giant announced that CEO Peter Zaffino would step down.
Advancing stocks outperformed declining stocks in the S&P 500 (.AD.SPX).opens a new tab At a ratio of 3.1 to 1.
The S&P 500 recorded 62 new highs and 8 new lows. The Nasdaq recorded 126 new highs and 42 new lows.
Reporting by Noel Landewicz in San Francisco. Additional reporting by Purvi Agarwal and Nikhil Sharma in Bengaluru. Editing: Maju Samuel and Matthew Lewis
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San Francisco correspondent covering the stock market with a focus on Big Tech, semiconductors and other Silicon Valley companies.
