The S&P 500 and Nasdaq Composite jumped Thursday as investors cheered the latest quarterly results from Nvidia, fueling a rally in technology stocks. Those moves also came as U.S. debt ceiling talks appeared to progress.
The tech-heavy Nasdaq popped 1.71% to settle at 12,698.09, and the S&P 500 climbed 0.88% to finish at 4,151.28. The Dow Jones Industrial Average dipped 35.27 points, or 0.11%, to end at 32,764.65 and close below its 200-day moving average.
Nvidia shares surged 24.4% a day after the company posted stronger-than-expected revenue guidance, and reported beats on the top and bottom lines in the recent quarter. Exploding demand for Nvidia chips used in artificial intelligence underpinned the quarterly beat.
Several analysts covering Nvidia hiked their price targets on the stock following the results. Nvidia's surge brought the chipmaker within striking distance of a $1 trillion market capitalization.
Other semiconductor stocks and artificial intelligence names followed Nvidia's lead. Advanced Micro Devices and Taiwan Semiconductor soared 11.1% and 12%, respectively. The VanEck Semiconductor ETF popped 8.6% to close at its highest level of the year; the fund hit a new 52-week high earlier in the session. Alphabet and Microsoft added 2.1% and 3.9%, respectively.
"The macro point is that innovation in technology can outweigh the headwinds of a slowing economy, or higher interest rates," said Dylan Kremer, co-chief investment officer of Certuity. "Technology in particular and growth stocks are not dead."
Despite Thursday's moves, concerns about market breadth persisted. Select companies and sectors are driving the market higher, masking some of the cracks beneath the surface, said Keith Lerner, Truist's co-chief investment officer.
"What you're seeing today is an extension of the existing trends being magnified even more with this news from Nvidia," he said. "It's a tale of two markets, and the winners are extending the lead and the losers are extending their losses on a relative basis."
Elsewhere, negotiations to raise the U.S. debt ceiling continued, with a default deadline quickly approaching. Talks between congressional leaders and President Joe Biden advanced Thursday, according to a report from Reuters, which said both parties merely need to agree on $70 billion in spending.
Uncertainty around the talks pressured equities this week, with the Dow and S&P 500 on track for weekly losses of roughly 2% and 1%, respectively. The Nasdaq is up 0.3%.
Fitch Ratings put the U.S.' AAA long-term foreign-currency issuer default rating on a negative watch late Wednesday, saying that ongoing negotiations heighten the risk that the government could miss payments on some of its obligations. Fitch said it still expects a resolution before the X-date.
— CNBC's Christina Wilkie contributed to this story.
The Nasdaq Composite and S&P 500 finished higher on Thursday as technology stocks rallied on the heels of a strong quarterly report from Nvidia.
The tech-heavy Nasdaq popped 1.71% to settle at 12,698.09, while the S&P climbed 0.88% to finish at 4,151.28. The Dow Jones Industrial Average dipped 35.27 points, or 0.11%, to end at 32,764.65.
— Samantha Subin
With political leaders reportedly making progress on a debt ceiling deal, investors are underplaying the risk of other hurdles before any deal becomes officially, said Matthew Brenner, managing vice president of investments and product management at MissionSquare Retirement.
"The focus is on the deal, but it's not about the deal. It's about the vote," Brenner said. "While our baseline assumption is consistent with most market players that a deal will be ratified, we think that the risk of a problem with the vote is higher than the market is giving credit to right now."
Brenner pointed to a 2008 bailout package that was initially voted down in the House of Representatives as a historical analog of the risks facing the market.
— Jesse Pound
Nvidia's jaw-dropping quarter won't resolve some "worrisome divergences" occurring within broader markets, according to Wolfe Research's Rob Ginsberg.
"Not even their blowout quarter and guidance will be enough to stem the slowly deteriorating action we continue to see across the board," he wrote in a Wednesday note to clients.
These "worrisome divergences" include many equity, credit and commodity charts taking out key near-term supports. He also noted that both transports and the equal-weighted S&P sit on the precipice of some crucial levels.
— Samantha Subin
S&P 500 and the Nasdaq Composite traded 0.8% and 1.5% higher, respectively, as the final trading hour kicked off.
Elsewhere, the Dow Jones Industrial Average fell 0.2%, or 63 points.
— Samantha Subin
Nvidia's upswing could bring the stock above $400 per share, according to Fairlead Strategies founder and managing partner Katie Stockton.
"The targeted objective that we can arrive at from this kind-of break out, we use something called a 'measured move projection,' [which] essentially assumes that the trajectory of the existing long-term uptrend will maintain itself," she told CNBC's "The Exchange" on Thursday, noting that bring Nvidia to an objective of about $409.
Nvidia stock added more than 25% on Thursday, bringing the company within reach of a $1 trillion market cap after a stellar quarterly print.
Stockton also added that Nvidia's big Thursday move could signal that the stock "might be overdone at least in the short-term."
— Brian Evans
The S&P 500 is up 8% on the year, with Thursday marking the 100th trading day of 2023. History shows the index has a strong full year when it finishes the 100th session with a year-to-date gain of more than 7%.
When the S&P 500 has risen more than 7% over the first 100 trading days in an average year going back to 1950, the index rallies another 9.4% over the balance of the year, for a total annual return of 23.6%. By comparison, the S&P 500 has gained an average of 9.8% annually since its inception in 1928, according to Investopedia.
CNBC Pro subscribers can read about how the index has performed historically when up that much.
— Alex Harring
While volatility in regional bank stocks remains much lower than it was several weeks ago, the stocks are once again underperforming as yields move higher.
Shares of PacWest Bancorp. fell about 6% on Thursday, while Western Alliance shed more than 1.9%. The SPDR S&P Regional Banking ETF (KRE) slid 1%.
— Jesse Pound
The AI stock boom is new and narrow, meaning that there is not yet a major ETF that serves as a pure-play on the trend, but several funds are outperforming this year with a focus on AI and related areas, like robotics.
For example, the Global X Robotics & Artificial Intelligence ETF (BOTZ) had a total return of more than 27% entering Thursday, and the fund has added nearly 3% today thanks to its large weight in Nvidia.
Check out more AI ETFs on CNBC Pro.
— Jesse Pound
The Dow Jones Industrial Average has continued trading down in Thursday's session despite Nvidia's rally pulling the S&P 500 and Nasdaq Composite up.
The 30-stock, blue-chip index was last down about 0.4%, while the broader S&P 500 added about 0.8%. Intel weighed on the Dow as the average's biggest laggard with an approximately 6.5% slide. Walgreens and Verizon also helped bring the Dow into negative territory as each slipped about 3%.
Less than a third of Dow members traded up in Thursday's session. All were up 1% or less, besides Microsoft, which gained almost 3.5%.
— Alex Harring
A key takeaway from Nvidia's blow-out forecast is what it has to say about data center demand, Andrew Rosivach, an analyst at Wolfe Research, wrote in a research note Thursday.
The size of Nvidia's data center unit now tops its gaming division, thanks to demand for AI chips. And CEO Jensen Huang said data center operators are retooling computing infrastructure to address AI opportunities as we speak.
"We wish we could quantify the importance to data center REITs, but it would appear the activity seen by NVDA would lead to increased workloads in a data centers, which would be positive for DLR and EQIX," he said.
Both Digital Realty Trust and Equinix shares are trading up more than 3% on Thursday.
—Christina Cheddar Berk
The S&P 500 tech sector jumped 4.2% on Thursday, putting it on pace for its biggest one-day gain since Nov. 30 — when it rallied 5%. The surge comes as investors cheered Nvidia's quarterly results and revenue guidance for the current quarter.
— Fred Imbert
Decliners at the New York Stock Exchange had the upper hand over advancers Thursday despite the gains seen in the S&P 500. Overall, roughly 2,000 NYSE-listed stocks traded lower while just 746 advanced. In other words, nearly three stocks fell for every advancer at the NYSE.
— Fred Imbert
Congressional leaders and President Joe Biden were close to a preliminary agreement to raise the debt ceiling on Thursday, according to a report from Reuters citing people familiar with the matter.
Progress between Biden and House Speaker Kevin McCarthy is pinned to $70 billion in discretionary spending, the report said.
— Brian Evans
Yields on short-term Treasury bills momentarily popped to levels last seen more than two decades ago.
The rate on the 1-month T-bill jumped to a high of 6.09%, the highest level on record going back to 2001. Meanwhile, the yield on the 6-month T-bill jumped to 5.48%, the highest level dating back to Jan. 3, 2001.
By mid-morning Thursday, the rates on these short-term Treasurys came off their lows. The 1-month T-bill yielded 5.736% and the 6-month T-bill inched back to 5.462% around 11:40 a.m. ET.
The recent spike in short-term Treasury yields occurs as tense debt ceiling negotiations in Washington continue. Rating agency Fitch added fuel to the fire late Wednesday by placing the United States' AAA status on "rating watch negative."
-Darla Mercado, Gina Francolla
Gold fell to its lowest level in two months as hopes of a debt ceiling deal weakened demand for bullion. U.S. gold futures hit a low of 1,939.2, or the lowest level since March 22nd when gold traded as low as 1,936.5.
Gold is lower by 1.7% this week, headed for its third straight week of losses. It's down 2.62% this month, on pace for its first down month in three.
— Sarah Min, Gina Francolla
The 3% bump in Best Buy shares is a big sigh of relief from investors, says Wells Fargo analyst Zachary Fadem. He noted that sentiment was weak heading into the report, but in-line same-store sales and an improving quarter to date was welcome news. That said, he cut his fiscal year estimates and plans to stay on the sidelines.
Another note of caution: the retailer is once again revamping its membership program, shifting into three tiers, cutting costs and altering the benefits. That's a sign the model wasn't working, Fadem said.
—Christina Cheddar Berk
Nvidia's mind-blowing rally Thursday NVDA is helping to hold up the entire U.S. stock market. How so? Consider:
1. According to FactSet, NVDA is responsible for all of the S&P 500's gains and nearly 90% of the Nasdaq-100's advance. Meanwhile, the Dow Jones Industrial Average — which isn't graced with NVDA's presence —is lower and underperforming the rest of the market. (Intel is in the Dow and is off by almost 6% Thursday.)
2. If NVDA were in the Dow, it would be pushing up the average by 525 points all by itself (77 x 6.8).
3. In the first 20 minutes of trading Thursday, NVDA volume surpassed an entire average day (40 million shares). That totaled more than $15 billion worth of shares.
4. Only seven months ago, Nvidia closed at a two-year low of $112. Since then it has soared a staggering 235%. No S&P 500 stock has come close over that span, with Facebook-parent Meta, for example, the second best, jumping 97%.
— Robert Hum, Scott Schnipper
Boston Federal Reserve President Susan Collins thinks the central bank where it stop increasing interest rates.
In a speech delivered Thursday to graduates from the Community College of Rhode Island, Collins indicated she's seeing "signs of moderation" from inflation that could negate the need for future hikes.
"I believe we may be at, or near, the point where monetary policy can pause raising interest rates. This will provide an opportunity to more fully assess the impact of the actions taken to date and the general tightening of credit conditions on economic activity," she said in prepared remarks.
Markets pricing, however, has shifted, with the expectation now that the Fed will raise a quarter percentage point by the July meeting.
—Jeff Cox
Multiple semiconductor ETFs reached new 52-week highs Thursday morning, led by Nvidia shares rallying more than 24% following its earnings and current quarter forecast announcement.
The VanEck Semiconductor ETF was up 6.5% Thursday, on pace for its strongest day of the year back to Nov. 10, 2022. The iShares Semiconductor ETF was up 4.4%.
The broader Technology Select Sector SPDR (XLK) Fund also gained 2.3% and reached a new 52-week high.
— Hakyung Kim, Gina Francolla
Vipshop shares rose 0.6% Thursday following an upgrade from JPMorgan.
The bank upgraded the stock to overweight following Vipshop's first-quarter earnings announcement earlier in the week.
"We believe Vipshop (VIPS) will be the best defensive play in the China ecommerce space in the next six months on earnings visibility/upside risks … and the share price correction over the past week (-13% vs. KWEB -6%) offers an entry point for investors," analyst Andre Chang wrote in a Thursday note.
CNBC Pro subscribers can read more about his upgrade here.
— Hakyung Kim