US STOCKS-Shares mixed, Nvdia surge offset by jitters over debt ceiling vote

Stocks on Wall Street were mixed on Tuesday, pressured by worries about Republicans who oppose a deal to raise the $31.4 trillion debt ceiling but supported by another surge in Nvdia shares that lifted the chipmaker into the rare club of companies valued at $1 trillion. The S&P 500 index fell but stayed near its highest level since August 2022.


Reuters | Washington DC | Updated: 31-05-2023 00:21 IST | Created: 31-05-2023 00:18 IST
US STOCKS-Shares mixed, Nvdia surge offset by jitters over debt ceiling vote
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Stocks on Wall Street were mixed on Tuesday, pressured by worries about Republicans who oppose a deal to raise the $31.4 trillion debt ceiling but supported by another surge in Nvdia shares that lifted the chipmaker into the rare club of companies valued at $1 trillion.

The S&P 500 index fell but stayed near its highest level since August 2022. The Dow Jones Industrial Average also was lower while the Nasdaq Composite rose. Over the weekend, U.S. President Joe Biden and Republican House of Representatives Speaker Kevin McCarthy agreed to temporarily suspend the debt ceiling and cap some federal spending.

The House Rules Committee was due to consider the 99-page bill at 3 p.m. ET (1900 GMT). Some right-wing Republicans said they opposed the bipartisan deal, setting the stage for a rocky path through Congress. McCarthy said on Tuesday that the deal should be "easy" for Republicans to vote for and was likely to pass.

"Getting the debt ceiling legislation signed into law is not going to take away the other overhangs that are still out there on the market," said Anthony Saglimbene, chief market strategist at Ameriprise Financial in Troy, Michigan. Federal Reserve rate hikes to fight stubborn inflation are denting economic growth and corporate profits, leaving about 20 companies to drive a 10% total return for the S&P 500 so far this year, Saglimbene said.

"All these other stocks have been able to do is tread water this year," he said. "That's more telling of this market environment than the actual index performance of these handful of tech stocks." The S&P 500 index hovered near its highest level since August 2022, just above 4,200 points.

Nvidia Corp gained 3.0

% to a record as the company bets on a surge in demand for its AI chips that power chatbot sensation ChatGPT and other applications. Digital Realty rose

2.3 % after surging 14.6% the prior two sessions on expectations data centers will benefit from AI computing.

The Philadelphia SE Semiconductor index was little changed but its session high was the highest level since February 2022. The S&P 500 technology sector added 0.7%. "Nvidia is the poster child for AI at the moment," said Thomas Hayes, chairman at Great Hill Capital LLC. "If this AI trend is real, the immediate demand is going to be in chips and computing power.

Only three of the S&P 500's 11 sectors were higher, while declining stocks outweighed advancing shares on both the S&P 500 and Nasdaq. The Dow Jones Industrial Average

fell 114.09 points, or 0.34%, to

32,979.25 , the S&P 500

lost 4.53 points, or 0.11%, to

4,200.92 and the Nasdaq Composite

added 26.63 points, or 0.21%, to

13,002.32 .

Data showed a consumer confidence rose more than expected in May, which could feed speculation that the Fed may hike rates more to fight inflation. Futures traders assign a 64.2% chance of a 25 basis point rate hike at the end of Fed policymakers' June 13-14 meeting.

The Labor Department's closely watched nonfarm payrolls report for May, due on Friday, should hint at how the economy's resilience as higher rates crimp company credit lines. The S&P 500 energy sector index fell 1.6%, tracking lower oil prices.

Tesla shares advanced 3.4%, extending Friday's gains. Top boss, Elon Musk, arrived in China's capital of Beijing on Tuesday, for the first time in three years. Even with the overhang of the debt ceiling debate, the S&P 500 and the Nasdaq are set for gains in May.

Declining issues outnumbered advancing ones on the NYSE by a 1.24-to-1 ratio; on Nasdaq, a 1.37-to-1 ratio favored decliners.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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