US open: Nvidia results buoy Wall Street, but debt talks still in focus
By Alexander Bueso
Date: Thursday 25 May 2023
(Sharecast News) - Wall Street's main market gauges were mostly in the green, boosted by bumper results from chip-maker Nvidia on the back of demand for AI products.
By 1500 BST, the Dow Jones Industrial Average had drifted lower by 0.03% to 32,790.27, but the S&P 500 was up by 0.58% to 4,139.81 and the Nasdaq Composite was ahead by 1.27% at 12,645.83.
The yield on the benchmark 10-year bond yield was five basis points higher at 3.765% alongside.
Nvidia was nearly 26% higher with its shares easily notching up fresh record highs after the manufacturer forecast second-quarter revenues of approximately $11bn, more than half above analysts' estimates.
The Philadelphia Stock Exchange's Semiconductor Index (SOX) was boosted by over 4% on the back of Nvidia's results
Nevertheless, Derren Nathan, head of equity research at Hargreaves Lansdown, was circumspect.
"The valuation now stands at an eye-watering 23 times forecasted full year sales and nearly 60 times earnings," Nathan said.
"With analysts predicting sales growth of just 21% these multiples look a little rich, suggesting that either growth needs to accelerate to justify their heady heights, or that the valuation will moderate.
On the economic side of things, all eyes remained fixated on the debt ceiling talks.
Overnight, Fitch Ratings put the US government's AAA long-term foreign-currency issuer default rating on 'negative watch'.
The ratings agency said it still expected a resolution to the debt limit before the deadline.
"The brinkmanship over the debt ceiling, failure of the US authorities to meaningfully tackle medium-term fiscal challenges that will lead to rising budget deficits and a growing debt burden signal downside risks to US creditworthiness," it said.
Fitch did however anticipate that the current impasse would be resolved.
Notwithstanding the above, in recent days Fed funds futures had priced in 40% odds of a 25 basis point rate hike at the Fed's 13-14 June policy meeting, while pricing out rate cuts until January 2024.
Elsewhere, the Department of Commerce nudged up its preliminary estimate for Q1 GDP growth from 1.1% to 1.3%.
Initial unemployment claims meanwhile were reported at up by 4,000 over the week ending on 13 May to reach 229,000 (consensus: 245,000).
The National Association of Realtors Pending Home Sales Index was unchanged in April month-on-month (consensus: 0.8%).
Dow Jones - Risers
Microsoft Corp. (MSFT) $320.69 2.18%
Goldman Sachs Group Inc. (GS) $322.50 0.84%
Caterpillar Inc. (CAT) $211.18 0.71%
International Business Machines Corporation (CDI) (IBM) $126.35 0.53%
JP Morgan Chase & Co. (JPM) $136.01 0.50%
Boeing Co. (BA) $200.13 0.43%
Apple Inc. (AAPL) $172.55 0.41%
American Express Co. (AXP) $151.22 0.33%
Nike Inc. (NKE) $108.54 0.23%
McDonald's Corp. (MCD) $286.30 0.13%
Dow Jones - Fallers
Intel Corp. (INTC) $27.39 -5.57%
Verizon Communications Inc. (VZ) $35.05 -2.30%
Chevron Corp. (CVX) $154.24 -1.93%
Amgen Inc. (AMGN) $217.77 -1.61%
Merck & Co. Inc. (MRK) $111.95 -1.46%
Johnson & Johnson (JNJ) $154.44 -1.42%
Walmart Inc. (WMT) $145.94 -1.14%
Walgreens Boots Alliance, Inc. (WBA) $30.44 -1.12%
Procter & Gamble Co. (PG) $144.73 -1.09%
Coca-Cola Co. (KO) $60.33 -0.90%
S&P 500 - Risers
Nvidia Corp. (NVDA) $379.30 24.21%
Dish Network Corp. (DISH) $7.18 15.33%
Arista Networks Inc. (ANET) $153.52 8.71%
Synopsys Inc. (SNPS) $429.10 8.52%
Advanced Micro Devices Inc. (AMD) $117.31 8.35%
Ralph Lauren Corp (RL) $116.34 7.50%
Cadence Design Systems Inc. (CDNS) $215.49 5.80%
MetLife Inc. (MET) $52.54 4.56%
Carnival Corp. (CCL) $11.15 4.45%
Adobe Systems Inc. (ADBE) $381.34 4.26%
S&P 500 - Fallers
Dollar Tree Inc (DLTR) $131.14 -15.58%
Medtronic Plc (MDT) $82.42 -5.80%
Intel Corp. (INTC) $27.39 -5.57%
Analog Devices Inc. (ADI) $164.43 -5.06%
Illumina Inc. (ILMN) $203.56 -4.27%
AT&T Inc. (T) $15.44 -3.23%
Albemarle Corp. (ALB) $205.60 -3.13%
Dollar General Corp (DG) $202.34 -3.12%
Coterra Energy Inc. (CTRA) $24.74 -3.02%
Diamondback Energy Inc. (FANG) $130.45 -2.92%
Nasdaq 100 - Risers
Nvidia Corp. (NVDA) $379.30 24.21%
Dish Network Corp. (DISH) $7.18 15.33%
Synopsys Inc. (SNPS) $429.10 8.52%
Qurate Retail Inc. (QRTEA) $0.94 6.91%
Cadence Design Systems Inc. (CDNS) $215.49 5.80%
Asml Holdings N.V. (ASML) $695.83 4.35%
Adobe Systems Inc. (ADBE) $381.34 4.26%
Applied Materials Inc. (AMAT) $126.55 3.96%
KLA-Tencor Corp. (KLAC) $422.89 3.42%
Micron Technology Inc. (MU) $68.74 3.32%
Nasdaq 100 - Fallers
Dollar Tree Inc (DLTR) $131.14 -15.58%
Intel Corp. (INTC) $27.39 -5.57%
Analog Devices Inc. (ADI) $164.43 -5.06%
Illumina Inc. (ILMN) $203.56 -4.27%
T-Mobile Us, Inc. (TMUS) $136.49 -2.51%
Gilead Sciences Inc. (GILD) $77.29 -2.22%
Microchip Technology Inc. (MCHP) $72.10 -2.07%
JD.com, Inc. (JD) $33.19 -2.05%
Trip.com Group Limited (TCOM) $31.38 -2.01%
Intuit Inc. (INTU) $407.57 -2.01%
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