NEW YORK: The Nasdaq surged on Thursday (May 25) following a blowout earnings report by chip company Nvidia while lingering worries about US debt ceiling negotiations weighed on the Dow.
Shares of Nvidia soared nearly 25%, lifting the company'’s valuation to close to US$1 trillion (RM4.6 trillion) after it projected a huge jump in revenues tied to booming artificial intelligence technology.
But that positive point was countered by an announcement by credit rating agency Fitch placing the United States on credit watch negative over the debt ceiling impasse.
The tech-rich Nasdaq Composite Index gained 1.7% to 12,698.09.
The Dow Jones Industrial Average slipped 0.1% to 32,764.65, while the broad-based S&P 500 advanced 0.9% to 4,151.28.
Thursday’s trading extended a pattern of tech share strength throughout 2023 “with a very compelling story about artificial intelligence and its potential as a growth driver,“ said Angelo Kourkafas of Edward Jones.
With Nvidia, “it is more than a story”, he said. “It is translating into actual spike in revenue and profits.”
But Kourkafas said gains were countered by uncertainty about US monetary policy and the chance of further interest rate hikes.
He also cited the debt ceiling impasse.
On Wednesday night, Fitch put the United States on notice that its perfect credit rating could be jeopardised if the White House and Republican opposition fail to overcome their impasse on raising the nation's borrowing limit.
On Thursday, US President Joe Biden expressed confidence about the talks.
“There will be no default,“ he said. Biden also said that his negotiations with Republican Speaker Kevin McCarthy, who leads the narrow majority in the House of Representatives, had been “productive”. – AFP