S&P 500 trades near the flatline as Nvidia shares decline: Live updates

The S&P 500 was little changed Wednesday as investors evaluate their holdings following a booming first half of the year led by artificial intelligence plays. The S&P 500 was on track for its fourth losing day in the past five as it closes out this week with a six-month gain of nearly 15%.

The broad market index was down by less than 0.1%. The Dow Jones Industrial Average inched up 21 points, or 0.1%. Meanwhile, the tech-heavy Nasdaq Composite added 0.1%. The Nasdaq is set for a 18.4% first-half gain because of a big run in Nvidia.

Nvidia declined 2% Wednesday after climbing 7% on Tuesday, its first positive day in four. The AI chipmaker’s $3.1 trillion market value has come to dominate the cap-weighted S&P 500, and its 150% surge in 2024 has sparked concerns that most other stocks are failing to participate in this year’s rally.

Stocks were also sluggish as investors await fresh inflation data on Friday with the release of May’s personal consumption expenditures price index. The Federal Reserve keeps a close eye on this gauge, and investors are hopeful that the central bank will lower interest rates at some point later this year if price increases continue to moderate.

The recent pullback across the broader market has raised speculation of whether the 2024 rally, largely powered by Nvidia, has run its course. The S&P 500 is trading less than 1% where Wall Street strategists anticipate the broad market index ending the year at, according to the CNBC Market Strategist Survey.

“The stock market right now is very expensive,” said David Bahnsen, chief investment officer at The Bahnsen Group. The investor believes a share price correction and reckoning is ahead for megacap tech names.

“Whether or not the past week’s volatility in tech stocks is the start of something deeper, or if that reckoning is still forthcoming remains to be seen, but excessive investor sentiment, euphoria and overdone momentum always ends the same,” Bahnsen said.

Most stocks were lower in the S&P 500 on Wednesday, but there were some positive standouts in the market. FedEx popped 12% after issuing adjusted earnings that surpassed estimates in the fiscal fourth quarter. Rivian Automotive soared 33% after Volkswagen Group said it would invest up to $5 billion in the electric vehicle company.