Traditionally, September has been a bearish month for stocks. Most investors tend to rebalance their portfolios and head out for summer vacations during this time.
However, this September defied the trend with robust performance.
On Tuesday, U.S. markets closed slightly higher across the board, buoyed by Nvidia’s rally despite looming government shutdown concerns.
The Dow Jones Industrial Average gained 0.18%, the S&P 500 rose 0.41%, and the Nasdaq Composite added 0.31%. Notably, the Dow reached a new all-time high.
This brings the monthly gains to 1% for the Dow, 3% for the S&P 500, and 5% for the Nasdaq, marking the strongest September performance since 2010.
Historically, the S&P 500 has struggled in September, averaging a 4.2% decline over the past five years. This year’s rally appears to be driven by the artificial intelligence (AI) boom.
Quarterly performance was equally impressive, with the Dow up 4%, the S&P 500 up 7%, and the Nasdaq up 10% – the best quarterly showing since 2020.
On this day, U.S. stocks managed to eke out gains across the board, propelled by Nvidia’s strong performance, even as shutdown fears loomed.
The previous day, Republican and Democratic leaders failed to reach an agreement on next year’s budget during last-minute negotiations at the White House, pushing the U.S. towards a likely government shutdown starting at 12:01 a.m. on Wednesday.
The shutdown will force government agencies to close, postponing the release of last month’s jobs report scheduled for this weekend, leaving investors navigating uncertain waters.
A prolonged shutdown could significantly impact the U.S. economy and potentially lead to a downgrade in the nation’s credit rating.
Despite these major headwinds, U.S. stocks managed to close higher, largely thanks to Nvidia’s rally.
Nvidia shares surged 2.58% to close at 186.57 USD, setting a new record high.
This rally was fueled by Citigroup’s bullish forecast, which projected AI-related capital expenditures to reach 2.8 trillion USD, with Nvidia expected to be the primary beneficiary.
Citigroup analyst Atif Malik released a report predicting that AI capital expenditures will total 2.8 trillion USD from 2025 to 2029.
This optimistic outlook propelled Nvidia to new heights, lifting most major tech stocks in its wake.
In the electric vehicle (EV) sector, Tesla gained 0.34%, while Rivian plunged 3.77%, highlighting the mixed performance in this space.
The semiconductor index also rose 0.87%, buoyed by Nvidia’s surge of over 2%.