- Nvidia continues to rise after the announcement of its inclusion in the Dow Jones index.
- Nvidia will replace Intel on Friday, November 8.
- The stock market should be somewhat volatile this week as the US presidential election takes place on Tuesday.
- Sherwin-Williams will also replace Dow, the chemical company, in the DJIA.
Nvidia (NVDA) rises at the start of Tuesday’s session once again. Nvidia gained on Monday after S&P Dow Jones announced over the weekend that it would replace the chipmaker Intel (INTC) with Nvidia in the Dow Jones Industrial Average (DJIA) on Friday, November 8.
Nvidia shares rose 2% on Monday, while Intel fell 2.9%. Both stocks were little changed in premarket Tuesday.
Furthermore, the paint producer Sherwin-Williams (SHW) rose 4.6% on Monday after the announcement that it will replace the chemical company Dow (DOW) in the Dow Jones index. The Dow Jones lost 0.6% on Monday, slightly worse than the NASDAQ and S&P 500, which both ended the session lower. But the Dow Jones rose at the start of Tuesday’s session.
Nvidia Stock News
Intel and Dow were two of the three lowest-weight members of the Dow Jones index. Intel has a market cap of $97 billion, and Dow has a market cap of $33 billion. In their place will be Nvidia, one of the largest US stocks with $3.3 trillion, and Sherwin-Williams with $94 billion. Nvidia took the #1 spot last week when it overtook Apple (AAPL) for first place.
Nvidia will certainly make the Dow more attractive to investors, but most know that they can get a bigger weight in Nvidia by investing in the NASDAQ or the S&P 500. Intel accounted for less than 1% of the Dow this year. Still, Nvidia’s inclusion likely provides the index with more upside opportunities. Nvidia remains a growth stock, while many components of the Dow are considered value stocks or blue chips.
Nvidia will bring greater exposure to artificial intelligence (AI) to the index as it is the lead designer of the most sought-after chips for AI workloads. However, Dow investors already have some exposure through Microsoft (MSFT) and Amazon (AMZN).
Nvidia is said to be considering investing in a new AI startup this week. This one, xAI, is owned by none other than Mr. Tesla himself, Elon Musk. For his part, Musk is discussing a new round of financing with investors that could value xAI between $45 and $75 billion. Nvidia has many such investments in AI startups, which use their seed funding to purchase Nvidia chips.
Other investors are focused on the consequences of Super Micro Computer (SMCI) lost its auditor last week. Super Micro is a company that builds water-cooled servers using Nvidia GPUs. As such, it is one of the largest consumers of Nvidia chips. Accounting firm Ernst & Young has resigned from its contract with the server maker, citing a lack of honesty on the part of management as it attempts to finish filing its annual 10-K report with the Securities and Exchange Commission (SEC).
In August, after short seller Hindenburg Research published a report purporting to show accounting irregularities, Super Micro immediately said it would delay its 10-K. Now the Department of Justice has gotten involved.
Nvidia said it is redirecting scheduled orders for Super Micro to other buyers, as the latter is now in danger of being delisted due to its inability to issue a 10-K.
Nvidia stock chart
Nvidia stock will likely face the same volatility this week as the rest of the market, as the US presidential vote is underway on Tuesday, November 5. Wall Street appears to be anticipating a Donald Trump victory, based on statements from several high-ranking bankers and hedge fund titans. However, betting markets that were heavily in favor of Trump in recent weeks have moved sharply toward parity since this past weekend, benefiting Vice President Kamala Harris.
A final poll from Iowa, which is not considered a swing state, showed Harris with a three percentage point lead this weekend. Most would like to dismiss the poll as it does not align with most other polls, but it comes from Ann Selzer, who is considered by many to be the most accurate pollster in the US. If the poll is correct, it would mean that the majority of the key states are likely to fall into the hands of Harris, the Democrat. With Wall Street positioned for a Trump victory, a Harris victory could spark a sell-off in the market.
As it stands, Nvidia’s chart shows NVDA stock is close to its June 20 high at $140.76. Above that level there is more resistance from late October near $144. Technically, Nvidia’s all-time high is $144.42 from October 22.
Nvidia is clearly in an uptrend, and that trend won’t end until the stock falls below the 50-day and 100-day SMA that now sit in the mid-$120 zone. However, support is likely to be found in that same region between $120 and $125.
NVDA Stock Daily Chart
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
