- Nvidia Corp hits record high on upbeat forecast
- Heavyweight AI players, Microsoft and Alphabet are rising
- Two rating agencies downgraded the creditworthiness of the United States
- Indices mixed: Nasdaq up 1.53%, S&P up 0.57%, Dow down 0.47%
May 25 (Portal) – The tech-heavy Nasdaq rose more than 1% on Thursday as Nvidia shares soared on a blowout forecast that also boosted other AI-related companies amid investors looking for signs waiting for progress on US debt ceiling talks.
Shares of Nvidia Corp (NVDA.O), the world’s most valuable publicly traded chip company, rose 26.3% to hit a record high after the company forecast quarterly revenue 50% ahead of estimates and said it would increase supply to meet demand for its artificial chips -Intelligence (AI) chips.
AI heavyweights like Microsoft Corp (MSFT.O) and Alphabet Inc (GOOGL.O) are up about 3.2% and 2.8%, respectively.
The Philadelphia SE Semiconductor Index (.SOX) rose 5.9% to its highest level in more than a year and will post its biggest daily percentage gain in more than six months if gains continue.
“It has become quite clear that AI is the start of a major investment boom and will solve real problems. They have immediate applications and also benefit large companies that already form the backbone of the stock market,” said David Russell, vice president of market intelligence at TradeStation.
Other chip companies including Advanced Micro Devices Inc (AMD.O), Micron Technology Inc (MU.O) and Broadcom Inc (AVGO.O) rose between 3.4% and 10.3%.
Intel Corp (INTC.O), which has little exposure to AI, fell 6.8%, limiting gains for the S&P 500 (.SPX).
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Wall Street’s main indexes have fallen sharply over the past two sessions and could post their worst week in more than two months as investors await clarity on an agreement to raise the country’s $31.4 trillion debt ceiling or risk default.
US President Joe Biden and Republican Rep. Kevin McCarthy were close to an agreement on the US debt ceiling, with the parties only $70 billion apart on discretionary spending, Portal reported, citing a source familiar with the talks .
Two-year yields hit their highest level since March on market uncertainty after rating agencies Fitch and DBRS Morningstar alerted the US to a possible downgrade.
Meanwhile, data showed that the number of Americans filing new jobless claims rose only moderately last week, while a Commerce Department report confirmed economic growth slowed in the first quarter.
As of 12:03 p.m. ET, the Dow Jones Industrial Average (.DJI) was down 155.23 points, or 0.47%, to 32,644.69, and the S&P 500 (.SPX) was up 23.47 points, or 0.57% 4,138.71 and the Nasdaq Composite (.IXIC) was up 191.44 points, or 1.53%, to 12,675.60.
Ralph Lauren Corp (RL.N) rose 8.6% after the luxury retailer beat earnings estimates.
Electronics retailer Best Buy Co Inc (BBY.N) rose 1.2% on positive quarterly earnings, while discount chain Dollar Tree Inc (DLTR.O) fell 11.3% on a cut to its full-year profit forecast.
Declining issuance outpaced ascending issuance on the NYSE by a 2.67-to-1 ratio and by a 2.35-to-1 ratio on the Nasdaq.
The S&P index posted nine new 52-week highs and 30 new lows, while the Nasdaq posted 41 new highs and 124 new lows.
Reporting by Shreyashi Sanyal and Shristi Achar A in Bengaluru; Edited by Arun Koyyur and Vinay Dwivedi
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Shreyashi Sanyal
Shristi Achar A