The major stock market indexes were mixed after trimming gains Tuesday afternoon. News of progress in raising the debt ceiling eased investors' minds, although hurdles remain.
President Joe Biden and House Speaker Kevin McCarthy sealed a tentative debt-limit deal Saturday night. The agreement includes a two-year debt-limit increase and will keep nondefense, nonveterans discretionary spending about flat with current levels over two years. It would also impose some new restrictions on certain government aid.
The bill needs to pass by a June 5 deadline; otherwise, the Treasury Department says it will run out of money to pay certain obligations. A House committee vote is set for today, and the full House could vote on Wednesday.
"I feel very good about it," Biden told reporters on Monday. "There is no reason it shouldn't get done" in time to avoid default, he added.
Stock Market News
The Nasdaq reduced its gain even more, to 0.2% in afternoon trading. The Dow Jones Industrial Average was 0.4% lower. The S&P 500 was down 0.1%. The iShares Russell 2000 ETF retreated 0.4%.
The Nasdaq's gains continue to be skewed by rallies in major techs such as Nvidia. The First Trust Nasdaq 100 Equal Weighted ETF edged 0.1% lower, indicating poor breadth.
NYSE and Nasdaq volume rose vs. the same time Friday, as traders get back to business after the long holiday weekend.
The Nasdaq 100-tracking Invesco QQQ Trust ETF rose 0.4%. The Innovator IBD 50 ETF rose 0.3% but pared gains.
Crude oil sank 4.8% to $69.17 per barrel. Gold futures rose 0.7% and remained below the psychological $2,000-per-ounce level. Bitcoin, meanwhile, rallied 3.3% to $27,790.
The 10-year U.S. Treasury yield trimmed 12 basis points to 3.69%. The CME FedWatch tool shows over 60% odds for a quarter-point rate hike at the June Fed meeting, and the remainder of Fed watchers expect no change.
European stocks were down, with the German DAX edging 0.3% lower, while the Paris CAC dropped 1.3%. The London FTSE pulled back 1.4%.
The May U.S. Consumer Confidence reading came in at 102.3 vs. the expected 100.0.
Stock Market Movers: Nvidia And AI In Focus Once Again
Nvidia, the graphics-chip maker and AI giant, hit the elite $1 trillion market cap level today.
The Leaderboard stock trimmed earlier gains, now up another 3.1% Tuesday in heavy volume, after the company announced it will build a generative AI super computer.
Shares have gained over 35% in the past three days and 40% for the month. Shares outperformed with a 180% gain this year and hit an all-time high today.
In a keynote speech in Taiwan, CEO Jensen Huang said on Sunday the company has ramped up production of the H100, its new flagship chip for generative AI. He said, "The demand is literally from every corner of the world," according to the Wall Street Journal. Huang debuted a host of AI-related services and products.
Shares gapped up over 24% on Thursday after a blowout first-quarter earnings report.
Ad agency stock WPP rose 1.3% on news it will partner with Nvidia on an images and video content engine.
Artificial intelligence software company C3.ai soared over 21% to add to Friday's breakout ignited by strong Marvell Technology and Nvidia earnings last week.
C3.ai raised its preliminary fiscal Q4 earnings and sales numbers on May 15, above analyst expectations. AI is set report its April-ended quarter financial results Wednesday after the closing bell. The stock is extended from a 34.78 buy point.
These Stocks Are Below Key Levels
IBD 50 stock Lantheus Holdings sold off for a second day in a row, losing 3.2% on top of Friday's 7% loss. Shares of the medical diagnostics company dropped below the 50-day moving average, flashing a warning sign.
Booking Holdings dropped 2.1% sending it further below the 50-day line it violated last week. Shares fell on news that the European Union is expected to issue a warning to the online travel agency about its bid for a Sweden-based travel company, according to Reuters.
Digital infrastructure platform operator New Relic tumbled 2.5%, taking it deeper below its 50-day line. The loss from the 80.98 buy point exceeds 10%, triggering a sell signal. TPG and a San Francisco private equity firm ended talks to buy NEWR, Reuters said Friday.
Futures: AI Stock Going Vertical With Earnings Due
Arista Networks Hits A Buy Point
Synopsys climbed 3.9% in heavy action on news of the chip design platform company's collaboration with U.K.-based Arm, on its AI-enhanced design. Synopsys shares are extended from the 392.89 buy point.
IBD 50 stock Fluence Energy surged 3.8% and hit the 24.87 buy point of a handle, before pulling back. Fluence provides energy storage and services and AI-enabled digital applications for renewables.
Cloud networking stock Arista Networks spiked 3.8% in heavy volume and broke out of a cup base with a 171.54 buy point. Shares are in the 5% buy zone to 180.12.
Confluent rose to a new high, topping a 29.82 buy point, although 25.78 acted as an earlier entry. Reports said Needham initiated coverage with a 35 price target and a buy rating.
Other Stock Market Movers: EV Stocks In Focus
Tesla popped 3.5% in heavy volume, and is forming a cup base with 207.89 buy point. The stock reclaimed its 200-day moving average.
Shares got a lift on news that CEO Elon Musk is expected to travel to China to tour the Shanghai Gigafactory, his first trip there in almost three years. The factory makes over 80,000 electric cars per month, according to Wedbush analyst Dan Ives.
Ford climbed 4.3% after Jefferies upgraded Ford to a buy rating from hold, and raised its price target to 16 from 13.
ChargePoint popped over 13% in heavy volume after Bank of America upgraded the electric vehicle charging station provider to buy from neutral, but lowered its price target to 14 from 15.50. ChargePoint will release its first-quarter earnings on Thursday after the market close.
Follow Kimberley Koenig for more stock news on Twitter @IBD_KKoenig.
