Hype about artificial intelligence
Nasdaq trumps, Dow Jones gives up
05/25/2023, 11:05 p.m
Ongoing US debt ceiling negotiations are weighing on Wall Street investors. Some technology companies stand out with hefty price gains. Overall, however, the US indices paint a mixed picture.
US stock markets fail to find common ground. The Dow Jones Index the standard values closed 0.1 percent lower at 32,764 points. The tech-heavy one Nasdaq however, advanced 1.7 percent to 12,698 points. The broad one S&P 500 increased 0.9 percent to 4151 points. An optimistic forecast made for a better mood despite ongoing concerns about the US debt dispute and the global economy Nvidia.
The group expects quarterly sales 50 percent above analysts’ expectations. The hype about artificial intelligence (AI) gave the US chip manufacturer a boom in demand. “It has now become clear that AI is the start of a major investment boom and will solve real problems,” said David Russell, manager at online broker TradeStation. “The technology has immediate applications and powers large companies that are already the backbone of the stock market.”
Nvidia’s stock jumped 24 percent. Rivals like AMD, Micron Technology and Broadcom also gained between 4.6 and 11.2 percent. Other technology groups with strong AI businesses like Microsoft and alphabet Nvidia followed, gaining 3.8 and 2.1 percent respectively. chip manufacturer intel however, fell 5.5 percent due to its smaller AI business.
The abrupt rise in Nvidia stock caused short sellers to lose billions. According to the financial analyst S3, investors who had bet on a falling price of the US chip manufacturer lost a total of around 2.3 billion dollars.
Solution in the debt dispute on Friday?
The share of was also in demand after strong quarterly figures Ralph Lauren. The titles of the US fashion provider rose by a good five percent. The company reported a surprising one percent increase in revenue to $1.54 billion in the fourth quarter. Analysts polled by Refinitiv had expected a drop to $1.47 billion on average.
However, the gains offset ongoing worries about negotiations for a rate hike debt ceiling in the USA. Although progress has recently been made in the talks between the Democrats of US President Joe Biden and the opposition Republicans, a solution is still not in sight.
You can read about how the trading day went on the Frankfurt trading floor in our stock market day.
According to the Treasury Department in Washington, the United States is threatened with insolvency from June 1 without an agreement. The result could be a complete standstill of the financial markets and the economy, warned Edgar Walk, chief economist at Metzler Asset Management. The rating agency Fitch threatened the US with a downgrade of the top credit rating “AAA”.
On the other hand, Kevin Hern, a high-ranking Republican representative in the House of Representatives, says that an agreement with the Biden government in the debt dispute is likely by Friday afternoon. The dollar, which is often used as a safe haven in times of crisis, was able to make up ground. It was also boosted by declining speculation about an imminent interest rate cut in the USA. The dollar index rose 0.4 percent to a fresh two-month high of 104.279 points.