Investing.com -- The S&P 500 surged Thursday, as an Nvidia-led surge in tech and progress on debt ceiling talks stoked bullish bets on stocks.
The S&P 500 was up 0.9%, the Dow Jones Industrial Average fell 0.1%, or 35 points, the Nasdaq gained 1.8%.
NVIDIA (NASDAQ:NVDA) surged 27%, taking its market cap to $956.52 billion and within touching distance of $1.000 trillion, after reporting better-than-expected first-quarter results and guidance that markedly topped Wall Street estimates.
The chipmaker said it expected second-quarter revenue of about $11.00B, well above analyst expectations of $7.00B, as the growing need for Artificial Intelligence bolsters the outlook for chip demand in its data center business.
“[O]ur expectations for NVDA's future revenues are lifting substantially with our revised FY2026 forecast now estimating $67B in sales (up nearly 50% from our prior outlook for $45B),” Wedbush said in a note after upgrading its rating on the stock to Outperform from Neutral, with a price target of $490, up from $290.
The record surge in Nvidia, led Monolithic Power Systems (NASDAQ:MPWR), which provides power management solutions for some of Nvidia’s chips, up 16%, while Taiwan Semiconductor Manufacturing (NYSE:TSM) and Advanced Micro Devices (NASDAQ:AMD) were also up sharply.
Sentiment on stocks was also boosted by signs that President Joe Biden and Republican Kevin McCarthy are nearing a deal to raise the debt ceiling needed to avoid a U.S. default.
Treasury Secretary Janet Yellen previously warned the U.S. could default on its debt repayments as soon as June 1. Ahead of the so-called X-date, or the day the U.S. won’t be able to pay its bills, credit rating agency Fitch put the U.S. creditworthiness on watch amid worries about a potential default.
On the earnings front, retailers were in focus as Best Buy Co Inc (NYSE:BBY) and Ralph Lauren (NYSE:RL) reported quarterly earnings that topped Wall Street estimates.
Dollar Tree (NASDAQ:DLTR), however, fell 10% after its second-quarter earnings missed Wall Street estimates as falling margins weighed on the bottom line.
Year-on-year gross margin declined by 343 basis points, driven by “lower initial mark-on, a mix shift toward consumables, and higher shrink, partially offset by lower freight costs,” Goldman Sachs said in a note.
On the economic front, an upward revision to U.S. economic growth in Q1 and fewer than expected weekly initial jobless claims pointing to a stronger economy dented expectations for a rate pause next month.
Following the data, the odds of a June hike climbed to 50% from 28% the prior day, according to Investing.com’s Fed Rate Monitor Tool.
In other news, DISH Network Corporation (NASDAQ:DISH) climbed nearly 8% as the company reportedly is in talks with Amazon (NASDAQ:AMZN) to sell wireless phone plan services via the e-commerce platform, the Wall Street Journal reported.