Nvidia, chip stocks rise on Fed's rate cut

The Federal Reserve's decision to cut its benchmark interest rate by 50 basis points is giving chip stocks, including Nvidia (NVDA), Broadcom (AVGO), and AMD (AMD) a boost.

In the video above, Morning Brief anchors Seana Smith and Brad Smith break down the action.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Stephanie Mikulich.

Video Transcript

Let's talk a little bit about NVIDIA here this morning, NVIDIA rising along with a number of chip stocks including Broadcom.

You've got a SML, you've got a MD and Taiwan semiconductor there on your screen, they're all higher.

This is part of a larger rally off of the fed's 50 basis point rate cut.

We were discussing earlier, what tech tends to do when the FED begins or initiates or is in the midst of its cutting cycle.

Tech tends to be one of the out performers and more largely, there's a broader consideration about how artificial intelligence and artificial intelligence names will continue to be beneficiaries there.

I've been looking through a couple of notes over the course of this week that still continues to be one of the plays that investors and uh investment strategists are leaning into as of right now.

You also had NVIDIA and Jensen Huang making an appearance at T Mobile's conference too new partnership.

You did.

And we actually had I I was doing the afternoon show yesterday, the Fed special and, and we had a chance to speak with Dan Ives in reaction to the basis and he was talking about back to no surprise.

I don't think this is gonna surprise anyone who's a regular uh viewer of the program.

He's very bullish on tech and he's viewing rate cuts as, as a bullish sign here for the sector going forward saying it's gonna offer a significant bump to the upside.

He was talking about the fact as to why everyone should be so excited about this next, like hire a lot of that driven by A I advancements, namely NVIDIA being the dominant player there, no news really to anyone there.

But when it comes to maybe some of that recent underperformance, when you take a look more broadly past NVIDIA, though NVIDIA might be a perfect uh example here given some of the underperformance as of late, but the Philly semiconductor index that has actually been off about 16% over the past three months.

So you're talking about the fact that maybe now if we do get a soft landing at the is in fact confident that we are going to be able to achieve that, then maybe we could see further move movement to the upside here for some of these semis going into the FOC two day meeting said without taking any single name views, we continue to like A I beneficiaries within the tech sector beyond technology, they see opportunities in quality companies with competitive market positions, resilient earnings streams and exposure to structural growth drivers such as the energy transition