U.S. stocks close mixed amid tech rally-Xinhua

U.S. stocks close mixed amid tech rally

Source: Xinhua| 2023-05-26 07:07:00|Editor:

NEW YORK, May 25 (Xinhua) -- U.S. stocks ended mixed on Thursday as companies linking to artificial intelligence (AI) fueled investors' enthusiasm, outweighing debt default concerns.

The Dow Jones Industrial Average fell 35.27 points, or 0.11 percent, to 32,764.65. The S&P 500 added 36.04 points, or 0.88 percent, to 4,151.28. The Nasdaq Composite Index increased 213.93 points, or 1.71 percent, to 12,698.09.

Six of the 11 primary S&P 500 sectors ended in red, with energy and utilities leading the laggards by losing 1.89 percent and 1.38 percent, respectively. Meanwhile, technology and communication services led the gainers by rising 4.45 percent and 0.43 percent, respectively.

The tech-heavy Nasdaq jumped after chip maker Nvidia issued an encouraging sales forecast due to increasing demand for artificial intelligence technology. Nvidia's stock surged 24.37 percent, boosting other shares tied to AI, which was a major theme driving markets Thursday.

Meanwhile, negotiations between U.S. President Joe Biden and congressional leaders advanced Thursday, with key Republican representative telling reporters that the list of issues dividing the two sides had grown shorter.

Biden said at a White House event that he and House Speaker Kevin McCarthy "had several productive conversations" and "our staffs continue to meet." This statement came one day after ratings agency Fitch warned about a possible U.S. credit rating downgrade.

"The Rating Watch Negative reflects increased political partisanship that is hindering reaching a resolution to raise or suspend the debt limit," said Fitch.

Fitch said it still expects a resolution to the debt limit before the x-date when the U.S. Treasury exhausts its cash position and capacity for extraordinary measures without incurring new debt.

"Wall Street is taking a very short break from debt ceiling angst/Fed tightening and focusing on Nvidia's AI boom. The Nasdaq is rallying as Nvidia's outlook bolstered bets that AI will be the key to mega-cap tech's growth story," said Edward Moya, senior market analyst at OANDA, a supplier of online multi-asset trading services.

"Debt ceiling drama also eased as Speaker McCarthy stated that some progress was made, though issues remain," said Moya.

Investors are also digesting a flurry of new economic data.

The U.S. Department of Labor reported Thursday that new jobless claims rose to 229,000 in the week ending May 20, compared with the previous week's revised level of 225,000.

The U.S. real gross domestic product (GDP) increased at an annual rate of 1.3 percent in the first quarter of 2023, compared with the preliminary reading of 1.1 percent, according to the second estimate from the U.S. Department of Commerce issued on Thursday.