May CPI this week, Nvidia stock split, Apple WWDC: 3 Things
What specific economic indicators are the equity markets (^DJI, ^IXIC, ^GSPC) closely monitoring this week?
The equity markets (^DJI, ^IXIC, ^GSPC) are closely monitoring two specific economic indicators this week:
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May's Consumer Price Index (CPI) report: This report provides information on the annual gain in consumer prices. Wall Street expects an annual gain of 3.4% on a headline basis and 3.5% on a core basis, which strips out food and energy prices.
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The Federal Reserve's latest interest rate decision: This decision will be announced after the Fed's June meeting. The benchmark rate is expected to remain steady in a range of 5.25% to 5.5%, as it has done since July of 2023. The markets will also be looking for guidance on the path of possible rate cuts in remarks from Fed Chair Jerome Powell.
How has Nvidia's market capitalization changed following the stock split, and what was its value just before and after passing the $3 trillion milestone?
Nvidia's market capitalization reached $3 trillion just before the stock split. After the stock split, the market capitalization remained the same at around $3 trillion, as a stock split does not change the overall value of the company. The split only increases the number of shares and lowers the price per share, making the shares more accessible to a wider range of investors.
What details can you provide about Nvidia's recent 10-for-1 stock split and its impact on the stock price?
Nvidia's 10-for-1 stock split, which went into effect on June 7, 2024, significantly impacted the company's stock price and accessibility for investors. Prior to the split, Nvidia's stock price was around $1,100 per share, making it less accessible to many everyday investors. The stock split increased the number of shares on the market without changing the company's valuation or market capitalization. As a result, the stock price was reduced to make stock ownership more accessible to employees and investors.
After the split, there were 10 times as many shares of Nvidia common stock, lowering the price of individual shares without impacting the total value of investors' Nvidia holdings or the company's market cap. For example, if Nvidia shares were trading at $1,000 before the split, an investor holding one share before the split would hold 10 shares priced at $100 each after the split.
The stock split could make investing in Nvidia more accessible to a wider range of investors and increase liquidity, as the stock's price at over $1,000 could discourage some from buying it. Additionally, the lower price could help get Nvidia added to an index like the Dow Jones Industrial Average (DJIA), which tends to avoid adding high-priced stocks as movements in price could have an outsized impact on the index.
It's important to note that while stock splits can generate excitement among investors, the stronger stock price gains aren't necessarily caused by the stock split itself but rather by the strong business and operating performance that fueled the stock price increases in the first place. In the case of Nvidia, growing demand for chips that can deliver AI-capable devices has driven the company's earnings and stock price higher.