It didn't take much to reignite Nvidia, AI rally: Strategist

US stocks (^DJI,^GSPC, ^IXIC) closed Wednesday's session in the green after August's Consumer Price Index (CPI) came in line with estimates. Meanwhile, Nvidia (NVDA) led the charge for the S&P 500 and Nasdaq, climbing more than 8% intraday after comments made by CEO Jensen Huang at the Goldman Sachs Communacopia and Technology Conference highlighted continued AI demand.

B. Riley Wealth chief market strategist Art Hogan joins Market Domination Overtime to discuss the most recent market movement.

Hogan explains that this day and week have been "interesting" for markets. He explains, "[This is] the first time that I can remember we've seen an S&P 500 lose and gain 100 points in a single week." He notes that volatility is typical for September, and believes that markets "overreacted" to CPI data. However, as September is also conference season, comments from Nvidia CEO Jensen Huang got investors "excited about AI again," taking markets back up.

"I think that when you take a step back and say, if our biggest concern is that today's modestly hotter core CPI number means the Fed's [Federal Reserve] going to go 25 basis points versus 50, that was consensus coming into the day, right? So it just went from 70% to 85% consensus. So I think it's just a major overreaction in what has become an oversold September tape. And I think that the rally in the afternoon probably makes a whole lot more sense," Hogan adds.

He notes that semiconductors were down about 23% going into Wednesday's trading day, and argues "it doesn't take much of a push to get investors back and excited about a group that was trading significantly higher than this just two months ago."

For more expert insight and the latest market action, click here to watch this full episode of Market Domination Overtime.

This post was written by Melanie Riehl

Video transcript

Pretty wild day as Ali was just mentioned there on Wall Street, major industries climbing from the lows of the day managing to post gains across the board.

NASDAQ leading the way, bringing up the rest of the market along with it.

Joining us now is B Riley Wealth Chief Market Strategist Art Hogan Art.

Always great to see you.

So let's talk about this market or you know, this morning, get the CP I print, we did see, you know, a slide there late morning, but then here comes NVIDIA Art surging 8% leading us back.

What, what do you make of of today's trade?

Yeah, interesting day, right.

So, you know, the the day is sort of like the week has been, right?

So the first time that I can remember, we've seen an S and P 500 lose and gain 100 points in a single week.

And, and that's very typical of September.

I think the reaction uh to the CP I likely was an overreaction and, and uh and then we started getting comments from a multitude of conferences that are going on September's conference season.

So it doesn't take much for NVIDIA to get people excited about A I again, especially with the selling pressure that the group has seen.

Of course, the last two months.

So a nice rebound there that took the rest of the technology group up with it, especially the uh A I adjacent names.

But I think that when, when you take a step back and say if our biggest concern is that today's modestly hotter core PC uh CP I number means the fed is gonna go 25 basis point versus 50.

That was consensus coming into the day, right?

So it just went from, you know, 70% to 85% consensus.

So I think it's just a, a major overreaction and what has become an oversold September tape.

And I think that the, you know, the, the, the rally in the afternoon probably makes a whole lot more sense.

Um What about I wanna drill down on NVIDIA and the tech reaction a little bit art and by the way, it's great to see you.

Um So Jetson Wong from what I read at the conference where he made comments say he didn't say anything that crazy.

He, he mostly reiterated that demand has been strong and there really hasn't been anything to challenge that demand has been strong.

Were people just looking for an excuse to get back in here on NVIDIA and some of the other big tech companies.

Yeah, so the semiconductors in general, you know, down some 23% coming into the morning already, right in the current selloff in both, you know, August and, and thus far in September.

So you've got an oversold group, it doesn't take much of a push to get investors back in, excited about a group that was trading significantly higher than this just two months ago to the extent that his commentary was revelatory.

It was much more about, hey, it's not just about data center, you know, there are gonna be other applications for artificial intelligence where, you know, you're looking at the tip of the iceberg.

But to your point, what we already know is all the hyper scalers have reported and talked about their ongoing cap act where, you know, 80 to 90% of that's going to NVIDIA.

So clearly oversold stock, oversold group, you know, calm commentary from the guy that runs the place and, and it didn't take much to sort of start that fire.