Salem Radio Network News Saturday, September 23, 2023

Business

Wall St set to open higher on tentative debt ceiling deal; Nvidia jumps

By Shreyashi Sanyal

(Reuters) – Wall Street’s main indexes were set to open higher on Tuesday as lawmakers tentatively agreed to raise the nation’s debt limit to avert a default, while shares of Nvidia led a rally among chipmakers and AI-related firms.

U.S. President Joe Biden and Republican House of Representatives Speaker Kevin McCarthy on Sunday signed off on an agreement to temporarily suspend the debt ceiling and cap some federal spending.

The U.S. House Rules Committee said it will meet at 3:00 p.m. ET (1900 GMT), to discuss the debt ceiling bill.

A handful of Republican lawmakers have said they will oppose it, in a sign that the bipartisan agreement could face a rocky path through Congress.

“The market is cautiously pricing in that the deal has been done,” said Thomas Hayes, chairman at Great Hill Capital LLC.

Reflecting investor optimism, the cost of insuring exposure to a U.S. debt default fell further on Tuesday, while yields on longer-dated U.S. Treasuries fell. [US/]

Nvidia Corp jumped 4.8% in premarket trading after it said on Monday it was building Israel’s most powerful AI supercomputer to meet soaring customer demand for AI applications.

The world’s most valuable chipmaker is on track to breach $1 trillion in market capitalization for the first time.

Shares of heavyweight AI-players including Microsoft Corp and Alphabet Inc rose about 1.5% each.

Other chipmakers including Advanced Micro Devices Inc, Marvell Technology Inc and Intel Corp added about 3% each.

“If this AI trend is real, the immediate demand is going to be in chips and computing power … and Nvidia is the poster child for AI at the moment,”¬†Hayes said.

At 8:22 a.m. ET, Dow e-minis were down 5 points, or 0.02%, S&P 500 e-minis were up 26.75 points, or 0.63%, and Nasdaq 100 e-minis were up 218.75 points, or 1.53%.

Tesla shares advanced 4.2% and were set to extend Friday’s gains.

The company’s top boss, Elon Musk, arrived in China’s capital Beijing on Tuesday, where he is expected to meet senior Chinese officials and visit the EV maker’s Shanghai plant.

Ford Motor Co added 3.6% after Jefferies upgraded the carmaker’s rating to “buy”.

Bucking the trend, energy majors Chevron and Exxon Mobil Corp fell nearly 1%, tracking slipping oil prices. [O/R]

Even with the overhang of the debt ceiling debate, the S&P 500 index and the Nasdaq are set for gains in May amid upbeat earnings and expectations that the Federal Reserve is nearing the end of its tightening cycle.

The S&P 500 closed at its highest level since August 2022 on Friday, notching 4,200 points.

Economic data through the week will also help market participants assess the impact of high interest rates and inflation on the American economy.

May consumer confidence data is due shortly after markets open, while the Labor Department’s closely watched nonfarm payrolls data for May is due on Friday.

(Reporting by Shreyashi Sanyal and Shashwat Chauhan in Bengaluru; Editing by Shounak Dasgupta and Maju Samuel)

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