A rally in chipmakers drove stocks to another record, with traders betting the potential for Federal Reserve rate cuts will keep fueling the industry that has powered the equity market this year.

The S&P 500 came closer to the historic 5,500 mark. Nvidia Corp. became the world’s most-valuable company — topping Microsoft Corp. — to extend this year’s record-breaking surge. A bullish analyst call projected the firm at the heart of the artificial-intelligence boom will hit nearly US$5 trillion in value in the coming year — from about $3.3 trillion. Bonds climbed as traders piled into a $13 billion sale of 20-year Treasuries.

Wall Street waded through mixed economic data that showed U.S. industrial production increased, helped by a broad-based pickup in factory output. Separately, retail sales barely rose and prior months were revised lower. A chorus of Fed officials emphasized the need for more evidence of cooling inflation before lowering rates.

“So far, the economy could pull off a soft landing, especially if the Fed is quick to adjust policy as conditions change,” said Jeffrey Roach at LPL Financial.

The S&P 500 hovered near 5,490, hitting its 31st all-time high of 2024. Nvidia climbed 3.5 per cent after Rosenblatt Securities analyst Hans Mosesmann hiked his price target on the chipmaker to a Wall Street high of $200 from $140. Treasury 10-year yields fell seven basis points to 4.21 per cent.

Bank of America Corp.’s institutional clients piled into U.S. equities for the second week in a row, led by technology and social media shares, strategists including Jill Carey Hall wrote in a note to clients.

Separately, a BofA survey showed that global investors are likely to keep pumping money into record-hitting stock markets.

Answering a question about the asset class that would benefit most from a reallocation of money-market funds, 32 per cent of respondents opted for US stocks. Another 19 per cent said the cash would go into global equities, while a quarter of the respondents indicated they would buy government bonds.

There’s not much doubt in the market right now to curb the enthusiasm about the U.S. stock rally driven by a small group of tech stocks. But some investors are increasingly looking for the ways to hedge the concentration risk.

And with each record, that concentration has tightened even more. The so-called Magnificent Seven companies have contributed more than 60 per cent to the S&P 500’s return this year.

Corporate Highlights:

• Dollar Tree Inc. continued to sell children’s applesauce tainted with “extremely high” levels of lead long after the company recalled the product due to contamination concerns, U.S. regulators said.
• Fisker Inc. filed for bankruptcy on Monday, months after the electric-vehicle startup stopped production of its only model, the oft-malfunctioning Ocean SUV.
• A Boeing Co. quality inspector alleged that the planemaker mishandled and lost track of hundreds of faulty parts, some of which he said may have been installed on new 737 Max planes, the latest revelation by a whistleblower pointing out possible misconduct at the manufacturer.
• Homebuilder Lennar Corp. reported better-than-expected orders, but its forecast for deals in the current quarter missed analysts’ estimates.
• Philip Morris International Inc. stopped online sales of its popular nicotine pouch brand Zyn in the U.S. after receiving a subpoena in the District of Columbia related to flavored products that are banned there.

Key events this week:

• U.K. CPI, Wednesday
• U.S. Juneteenth holiday, Wednesday
• China loan prime rates, Thursday
• Eurozone consumer confidence, Thursday
• U.K. BOE rate decision, Thursday
• U.S. housing starts, initial jobless claims, Thursday
• Eurozone S&P Global Manufacturing PMI, S&P Global Services PMI, Friday
• U.S. existing home sales, Conf. Board leading index, Friday
• Fed’s Thomas Barkin speaks, Friday

Some of the main moves in markets:

Stocks

• The S&P 500 rose 0.3 per cent as of 4 p.m. New York time
• The Nasdaq 100 was little changed
• The Dow Jones Industrial Average rose 0.1 per cent
• The MSCI World Index rose 0.4 per cent

Currencies

• The Bloomberg Dollar Spot Index fell 0.2 per cent
• The euro was little changed at $1.0738
• The British pound was little changed at $1.2708
• The Japanese yen was little changed at 157.85 per dollar

Cryptocurrencies

• Bitcoin fell 3.2 per cent to $64,239.48
• Ether fell 2.6 per cent to $3,420.52

Bonds

• The yield on 10-year Treasuries declined seven basis points to 4.21 per cent
• Germany’s 10-year yield declined two basis points to 2.40 per cent
• Britain’s 10-year yield declined seven basis points to 4.05 per cent

Commodities

• West Texas Intermediate crude rose 1.4 per cent to $81.49 a barrel
• Spot gold rose 0.5 per cent to $2,329.70 an ounce