1 Reason Why Nvidia Stock Is Rising Today
What happened
Nvidia (NASDAQ: NVDA) shareholders were in for a pleasant surprise Friday as the semiconductor maker made significant gains. As of 1:05 p.m. ET, Nvidia's share price had surged by 9.8% as investors became more bullish about the market in general. The tech-heavy Nasdaq Composite was up by nearly 4% at that point in the session.
So what
There's no clear reason why the broader market -- and Nvidia's shares -- are rebounding Friday, but it's likely that after the pummeling that technology stocks have received over the past several months, some investors think the sector is ripe for a comeback.
Image source: Getty Images.
Investors have been distancing themselves from high-growth technology stocks over the past six months as soaring inflation and a big shift in the Federal Reserve's fiscal policy have spurred fears of a potential economic slowdown.
But investors appear to be shrugging off some of those concerns Friday, perhaps in the hope that tech stocks have nearly reached their bottom.
Now what
The broader market's rally Friday -- and Nvidia's share price pop, too -- are great to see. But investors should stay clear-eyed about what's happening in the market.
Investors, in general, have been digesting news of the first few interest rate hikes by the Federal Reserve in years, and they're also factoring in a series of upcoming rate hikes that will likely come throughout 2022 and 2023. With U.S. inflation at levels not seen in nearly 40 years, Americans are growing pessimistic, and even Fed Chairman Jerome Powell said Thursday that he can't guarantee the central bank's ability to engineer a so-called soft landing for the economy while it's striving to get inflation back in check.
So while Nvidia's price bounce is great, long-term investors should be prepared for more oscillations from this tech stock.
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Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
