US equity benchmarks rose on Monday, building on gains from last week's post-election rally as major averages hit record highs. Last week's rally saw S&P 500 and the Dow Jones Industrial Average experiencing their best weeks in nearly a year.
Stocks added to the Dow Jones Industrial Average, or DJIA, often underperform, while those deleted frequently outperform, suggesting Nvidia Corporation's inclusion may not be bullish. Historical DJIA changes show cyclical stocks are often added at highs and deleted at lows, cautioning against over-optimism for Nvidia. The S&P 500 has outperformed the DJIA since 2010, highlighting the limitations of the DJIA's 30-stock composition in reflecting the broader market.
U.S. stocks traded higher this morning, with the Dow Jones index gaining more than 400 points on Monday.
The NASDAQ 100 rallied slightly in the early hours on Monday, as we continue to see a lot of noisy upward pressure after the election.
The Dow is less representative of value and dividend stocks and more focused on general industry leadership.
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NVIDIA Corp (NASDAQ:NVDA, ETR:NVD) officially joined the Dow Jones Industrial Average on Friday, underscoring the artificial intelligence (AI) chipmaker's rising prominence in the tech sector and AI-driven economy. The stock is set to close the week with a gain of roughly 9%, bolstered by demand for Nvidia's AI chips.
Chipmaker Nvidia (NVDA) and paint company Sherwin-Williams (SHW) have joined the Dow Jones Industrial Average (^DJI) this Friday, replacing Intel (INTC) and Dow Inc. (DOW). Yahoo Finance markets and data editor Jared Blikre joins the Morning Brief to break down the push for more tech representation in the Dow, which historically lacked many tech stocks until companies like Microsoft (MSFT) and Intel joined during the dot-com bubble.
US equity benchmarks rose slightly on Friday as investors assessed the Federal Reserve's interest rate cut on Thursday. The US Fed cut interest rates by 25 basis points on Thursday, and Chair Jerome Powell hinted at further easing of monetary policies in the coming months.
Nvidia's stock is now a below-average member of the 128-year-old Dow Jones Industrial Average.
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