© Reuters. FILE PHOTO: A trader work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., May 24, 2023. REUTERS/Brendan McDermid
By Shreyashi Sanyal and Noel Randewich
(Reuters) – Wall Street surged on Thursday after a blowout forecast from Nvidia (NASDAQ:) sent the chipmaker’s stock soaring and fueled a rally in AI-related companies, while investors watched for signs of progress in U.S. debt ceiling talks.
Nvidia Corp jumped 26% to a record high after the world’s most valuable chipmaker forecast quarterly revenue 50% higher than estimates and said it was ramping up supply to meet demand for its artificial-intelligence (AI) chips.
Investors had exchanged over $47 billion worth of Nvidia’s shares as of mid-afternoon, according to Refintiv data.
“Nvidia has officially replaced FANG as the centerpiece of this market,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma. “Investors are obsessed with AI, and Nvidia is the perfect AI story.”
Heavyweight AI players Microsoft Corp (NASDAQ:) and Alphabet (NASDAQ:) Inc rose 3.7% and 2.3%, respectively. Advanced Micro Devices (NASDAQ:) Inc jumped about 10%, Micron Technology Inc (NASDAQ:) added 3.9% and Broadcom (NASDAQ:) Inc climbed 6%%.
The soared 6.3% to its highest level in more than a year and was on track for its biggest daily percentage rise since November.
Among the 11 sector indexes, information technology jumped 4.5%. Six sector indexes declined, led lower by energy, down 1.68%, followed by a 1.24% loss in Utilities.
Intel Corp (NASDAQ:), which investors view as lagging in the AI race, fell 6.1%, weighing on the .
Wall Street has been jittery in recent days about dragging negotiations in Washington to raise the nation’s $31.4 trillion debt ceiling and avoid a default.
U.S. President Joe Biden and Republican lawmaker Kevin McCarthy on Thursday were edging close to a deal, with the parties just $70 billion apart on discretionary spending, Reuters reported, citing a source familiar with the talks.
Reflecting market uncertainty, two-year yields hit their highest since March after ratings agencies Fitch and DBRS Morningstar put the United States on a credit watch for a possible downgrade. [US/]
Meanwhile, data showed the number of Americans filing new claims for unemployment benefits rose only moderately last week, while a Commerce Department report confirmed economic growth slowed in the first quarter.
The S&P 500 was up 1.17% at 4,163.37 points.
The Nasdaq gained 1.99% to 12,732.28 points, while the Dow Jones Industrial Average was up 0.15% at 32,848.08 points.
With Thursday’s gain, the S&P 500 is up about 8% so far in 2023 and the Nasdaq has recovered over 30% from its losses last year.
Ralph Lauren Corp (NYSE:) rallied 6% after the luxury retailer beat profit estimates.
Electronics retailer Best Buy Co Inc (NYSE:) rose 2.1% following upbeat quarterly earnings, while discount store chain Dollar Tree Inc (NASDAQ:) fell almost 10% after cutting its annual profit outlook.
Declining stocks outnumbered rising ones within the S&P 500 by a 1.5-to-one ratio.
The S&P 500 posted 11 new highs and 31 new lows; the Nasdaq recorded 45 new highs and 144 new lows.
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