The facade of the New York Stock Exchange (GETTY IMAGES NORTH AMERICA/AFP/SPENCER PLATT)
The New York Stock Exchange ended in scattered order on Thursday, torn between a technology sector inspired by the flamboyant forecasts of processor giant Nvidia and the rest of the market, concerned about the approach of a possible default of the United States.
The Dow Jones fell 0.11%, the Nasdaq index gained 1.71% and the broader S&P 500 index rose 0.88%.
The session was led by Nvidia (+24.37%), whose ambitious forecast for the second quarter shook the whole place.
Specialist in graphics cards, processors that have become essential in the race for artificial intelligence (AI), the Santa Clara group sees investments in data centers (data centers) reaching a trillion dollars to meet the new requirements of the AI.
“Nvidia has become synonymous with AI,” summed up analyst Rob Enderle, of Enderle Group. “They are the only company that offers an end-to-end solution for AI. They are in the right place at the right time.”
In one day, the company which has just celebrated its 30th anniversary has gained more than 180 billion dollars in market value and is now approaching a trillion in capitalization, a very closed circle which has only five members in the world.
Driven by the Nvidia surge, many of the major players in AI, in particular so-called generative artificial intelligence, have been sought after on Wall Street.
Semiconductor manufacturers AMD (+11.16%), Broadcaom (7.25%) or TSMC (+12.00%), Taiwanese but listed on Wall Street, as well as Microsoft (+3.85%) and Alphabet (+ 2.23%), thus pranced.
“It looks like what we’ve seen since the start of the year, with prices supported by technology and the growth potential of artificial intelligence,” commented Angelo Kourkafas of Edward Jones. “For some companies, including Nvidia, it’s more than a prospect, it’s already translating into revenue and profit.”
The battle of the AI will not only make winners. While much of the tech was celebrating, the remote computing specialist (cloud) Snowflake unscrewed (-16.50%) after reporting a slowdown in demand.
The euphoria of the technological sector has not been transmitted to the rest of the New York market, still tense by the debt crisis, which has not yet recorded any major progress on Thursday, one week from a possible default of the UNITED STATES.
The day’s indicators also confirmed the strength of the US economy, far from the slowdown expected by the US central bank (Fed).
US growth was revised upwards for the first quarter, to 1.3% on an annual basis against 1.1% initially announced, and weekly jobless claims came out below economists’ projections.
“Inflationary pressures remain, forcing central banks to wonder about possible further rate hikes,” said Angelo Kourkafas.
Traders now give a 50% chance of another Fed hike in June, a scenario they almost completely ruled out a month ago.
This context has caused bond yields to rise sharply for several weeks. On Thursday, the yield on 2-year US government bonds stood at 4.53%, the highest for two and a half months, against 4.37% the day before closing.
This high rate environment is bad for equities as it reduces lending and weighs on the economy.
On the side, the chain of electronic goods stores Best Buy gained height (+3.08%) after publishing a quarterly net profit above expectations and confirming its forecasts for the entire financial year. The general manager, Corie Barry, nevertheless acknowledged that “customers (were) cautious and (made) arbitrations” in their purchases.
American Airlines soared (+4.20%) after statements by financial director Devon May, who estimated that a court decision canceling its partnership with JetBlue on certain routes in the northeastern United States would have no impact on the group’s results.
© 2023 AFP
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