Stock market today: Tech lead more gains in early trading on Wall Street
May 26, 2023, 12:29 AM | Updated: 6:42 am
NEW YORK (AP) — Stocks are opening higher on Wall Street, led by more gains in technology stocks as another chipmaker reported strong demand related to artificial intelligence. The S&P 500 was up 0.3% in the early going Friday, and the Nasdaq composite was up 0.4%. The Dow rose 80 points, or 0.3%. Marvell Technology jumped 23% after the chipmaker said it expects AI revenue in fiscal 2024 to at least double from the prior year. That follows Thursday’s report from fellow chipmaker Nvidia, which gave a big forecast for upcoming sales related to AI. Treasury yields rose after another tick higher in inflation.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
Wall Street followed world markets modestly higher early Friday, lifted by optimism that Congress and the president will strike calamitous default.
Futures for the Dow Jones Industrial Average and the S&P 500 each rose about 0.2% before the bell.
Officials said President Joe Biden and House Speaker Kevin McCarthy were narrowing in on a two-year budget deal that could open the door to lifting the nation’s debt ceiling. The Democratic president and Republican speaker hope to strike a budget compromise this weekend.
A two-year deal would raise the debt limit for that time, past the 2024 presidential election. As their price for raising the legal debt limit, Republicans have been demanding spending cuts the Democrats oppose.
U.S. markets on down this week on worries that Washington could run out of cash to pay its bills as soon as June 1, unless Congress allows it to borrow more.
The widespread expectation is for a compromise before it’s too late, as has happened dozens of times before, because a failure would likely be awful for the economy.
Fitch said late Wednesday that it could downgrade the U.S. government’s “AAA” credit rating, though it said it still expects a resolution before the U.S. Treasury runs out of cash.
There is also new data being released Friday on consumers pending, which is getting a lot of attention due to high rates of inflation.
In premarket trading Friday, shares of Marvell Technology jumped 17% after the chipmaker said it expects AI revenue in fiscal 2024 to at least double from the prior year and continue rapid growth. Marvell’s rise helped push the tech-heavy Nasdaq index 0.4% higher.
On Thursday, the S&P 500 rallied 0.9% after chipmaker Nvidia gave a monster forecast for upcoming sales as it benefits from the tech world’s rush into AI. The Nasdaq leaped 1.7%, while the Dow industrials slipped 0.1%. Nvidia shares rose more than 24% Thursday.
Stocks of other chip makers also charged higher after Nvidia described a race by its customers to put AI “into every product, service and business process.” Marvell rose more than 7% on Thursday.
The AI field has become so hot that critics warn of a possible bubble, while supporters say it could be the latest revolution to reshape the global economy.
“Although no one questions the potential of AI, the valuations seem to have gone ahead of themselves and it could soon be time for correction,” Ipek Ozkardeskaya of Swissquote said in a commentary.
The enthusiasm carried over to Asia, where Tokyo’s Nikkei 225 gained 0.7% to 31,019.61. In Seoul, the Kospi climbed 0.2% to 2,558.81, helped by a 2.2% rise in the share price for Samsung Electronics, South Korea’s biggest company.
The Shanghai Composite index added 0.4% to 3,212.50, while the S&P/ASX 200 in Sydney also was 0.2% higher, at 7,154.80.
In Europe at midday, Germany’s DAX gained 0.4%, while the CAC 40 in Paris rose 0.5% and Britain’s FTSE 100 was up 0.3%.
In other trading Friday, benchmark U.S. crude oil reversed an early retreat, picking up 67 cents to $72.50 per barrel in electronic trading on the New York Mercantile Exchange. It sank $2.51 on Thursday to $71.83 per barrel.
Brent crude, the international standard, rose 57 cents to $76.75 per barrel.
The U.S. dollar fell to 139.73 Japanese yen from 140.07 yen. The euro rose to $1.0752 from $1.0726.
Kurtenbach reported from Bangkok; Ott reported from Silver Spring, Md.