NEW YORK: All three major US stock-market indices closed higher on Thursday (May 18) following better-than-expected earnings results for Walmart and optimism over the future profitability of artificial intelligence (AI).
“Everybody’s really excited about the potential for artificial intelligence and what that could mean for productivity,” Tom Cahill from Ventura Wealth Management told AFP on the day ChatGPT announced an app-based version of its popular AI assistant.
“And so I think that’s, to a large extent, that’s what’s driving the technology stocks higher,” he added.
The Dow Jones Industrial Average rose 115.14 points, or 0.34%, to 33,535.91; the S&P 500 gained 39.28 points, or 0.94%, at 4,198.05; and the Nasdaq Composite added 188.27 points, or 1.51%, at 12,688.84.
There was also optimism on Thursday around the state of talks to lift US borrowing limits and stave off a catastrophic debt default, with Republican House speaker Kevin McCarthy suggesting a vote on the issue could be possible as early as next week.
“We’re not there – we haven’t agreed to anything yet – but I see the path that we could come to an agreement,” he said in his most upbeat assessment yet of the standoff over the debt ceiling between Republicans in Congress and Democratic President Joe Biden.
“I think we have the structure now and everybody’s working hard,” he added.
But the optimism in Congress hasn’t fully filtered through to the financial markets, according to Cahill.
Despite better-than-expected corporate earnings, debt ceiling talks and talk of another interest-rate increase by Fed officials this week have been “weighing on markets”, he said.
“I think investors are confused,” he added.
Walmart stock finished the day up more than 1.3% on the back of revenues that beat estimates and improved annual guidance.
Chipmaker Micron Technology Inc’s shares gained 4.08% as it plans to invest up to ¥500 billion in Japan for new chips over the next few years.
“Today and yesterday it’s really been about some easing pressure from the debt ceiling, McCarthy again came out expressing some optimism a deal could be formed by the end of the week, House could vote on a bill the following week,” said Anthony Saglimbene, chief market strategist at Ameriprise Financial in Troy, Michigan.
“If we get a debt ceiling agreement at the end of the week here and remove that macro issue, you still have the Fed meeting in June, now that is probably a live meeting based on what some of the policymakers have been saying this week, so that could be a concern, it could kind of cap some of the momentum in the market,” he said. – AFP, Reuters
Source: The Sun Daily
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