(ABM FN-Dow Jones) The US stock markets ended mostly higher on Thursday. The S&P 500 gained 0.9 percent at 4,151.28 points, the Dow Jones index fell 0.1 percent at 32,764.65 points and the Nasdaq closed 1.7 percent higher at 12,698.09 points.
Statements from chip maker Nvidia fuel hopes that AI programs will deliver a new period of growth for some big tech companies. Nvidia’s revenue expectations “met the hype around generative AI,” according to KeyBank Capital Markets.
Meanwhile, uncertainty surrounding the US debt ceiling continues. “The prospect of the US government defaulting on its financial obligations continues to be a critical influence on global equity market sentiment,” said Hargreaves Lansdown.
Concerns about a possible default have pushed yields on one-month government bonds to more than 7 percent in some cases.
Fitch has meanwhile issued a so-called ‘rating watch negative’ for the creditworthiness of the US.
“Since the financial crisis in 2008, these kinds of warnings haven’t had the effect they used to,” said CMC Markets market analyst Michael Hewson, who is still counting on a deal on the debt ceiling, though a deal is likely to be lifted over the weekend. .
There was economic news on Thursday from the Chicago area, where the Fed index improved from -0.37 in March to +0.07 in April.
The growth for the US economy was adjusted in a second estimate to 1.3 percent for the first quarter, instead of 1.1 percent growth. This is still considerably less than a quarter earlier, when US gross domestic product rose by 2.6 percent.
Hewson pointed to PCE core inflation in the first quarter, which came in at 5 percent. This caused the US two-year interest rate to rise to almost 4.50 percent, or the highest level since March, on expectations that the Federal Reserve will raise rates in June anyway.
The market currently estimates the probability of a 25 basis point increase at 49 percent, so only a narrow majority is counting on a pause. The chance of another increase was less than 35 percent a week ago. Current PCE inflation data for the month of April will be published on Friday.
The weekly number of new claims for unemployment benefits rose slightly from 225,000 to 229,000, but that 225,000 was significantly lower than the previously reported 242,000.
Oil prices fell on Thursday. At a settlement of $ 71.83, a barrel of West Texas Intermediate became 3.4 percent cheaper. Russian Deputy Prime Minister Alexander Novak does not expect additional production cuts to be announced when OPEC+ meets on June 4, Reuters reported. The stronger dollar also put pressure on oil prices on Thursday, according to Oanda market analyst Edward Moya.
The euro/dollar was down 0.3 percent towards the close in New York at 1.0719.
Company news
Nvidia reported to expect record second quarter revenue of $11 billion, up from the previous all-time high of $8.3 billion. Analysts expected a limited increase from $ 6.7 billion to $ 7.2 billion. The strong focus of major companies such as Microsoft and Google on AI programs will lead to higher revenues in the short term, CEO Jensen Huang said. Analysts from ING and Degroof Petercam call the news very good news for the sector. The stock rose more than 24 percent.
Snowflake, provider of software for data storage in the cloud, reported a disappointing loss of $ 226 million last night, despite strong revenue growth. The adjusted profit figure was higher than expected. Furthermore, the outlook that Snowflake gave is lower than the consensus. The stock fell more than 16 percent.
Best Buy has less sales in the first quarter of 2023, but more profit than expected. Sales fell from $10.6 to $9.5 billion, and earnings per share from $1.57 to $1.15, while analysts had expected $1.10. The share of the American electronics retailer rose more than 3 percent.
American Eagle Outfitters lost about 12 percent after the company said it expects second-quarter sales to be several percent lower than a year earlier. Nutanix is counting on more turnover than expected and therefore closed almost 17 percent higher.
Source: ABM Financial News
From Beursplein 5, the editorial staff of ABM Financial News closely follows developments on the stock exchanges, and the Amsterdam stock exchange in particular. The information in this column is not intended as professional investment advice or as a recommendation to make certain investments.
