CNBC Daily Open: The A.I. rally is too narrow

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A person seen using an AR Headset at NVIDIA booth at COMPUTEX 2023 in Taipei.

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This report is from today's CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribehere.

There are clear winners in the AI race. Everyone else, however, is a bystander reaping no benefits and that could have implications for broader markets.

What you need to know today

• Fresh off the Memorial Day break, U.S. markets traded mixed Tuesday, though major indexes registered only marginal movement. Europe's Stoxx 600 index fell almost 1%, led by a 2.7% drop in food and beverage stocks.

• So near, yet so far: Nvidia briefly hit a $1 trillion market capitalization Tuesday. But the chipmaker's shares lost momentum and fell during the trading day, giving it a market cap of $990 billion at close. Still, that's nothing to sniff at: Its shares are at a 52-week high.

• Elon Musk met with China's Foreign Minister Qin Gang on Tuesday. According to a statement from the country's foreign ministry, Musk praised China's achievements while Tesla, Musk's electric vehicle company, opposed "decoupling" from China. Tesla did not immediately respond to a CNBC request to verify those statements but investors responded by pushing up Tesla's shares 4.14%.

• China's economy isn't rebounding from the country's strict lockdown as strongly as many had hoped. Services and consumption are up, but manufacturing and employment aren't faring well. Thus, some economists think the Chinese government and central bank might stimulate the economy and loosen monetary policy.

• The deal to suspend the U.S. debt ceiling is poised to clear the House Rules Committee as seven of nine Republicans on the committee look set to approve the deal. Next, it would be sent to the House floor for a vote within 24 hours.

• PRONvidia's astounding surge has dominated the headlines lately, but there's another chipmaker that's also benefiting from the frenzy over artificial intelligence. Its stock has jumped 71% this year, rallying more than 32% on Friday alone.

The bottom line

There are clear winners in the AI race. Everyone else, however, isn't so much a loser, but a bystander reaping no benefits and that could have implications for broader markets.