NEW YORK: The Nasdaq led gains among Wall Street’s main indexes on Tuesday, boosted by shares of Nvidia, amid cautious optimism about lawmakers tentatively agreeing to raise the nation’s debt limit to avert a default.
US 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 US House Rules Committee said it will meet at 3:00 p.m. ET (1900 GMT), to discuss the debt ceiling bill.
Ralph Norman, a hardline conservative Republican, said he will vote against the bill, if it is not amended.
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.
“It’s a bit of mixed sentiment, on one hand, there’s certainly an exhale of relief that something has gotten done, but on the other hand, the markets have gotten pretty extended,” said Michael James, managing director, institutional equity trading at Wedbush Securities.
The S&P 500 index hovered near its highest level since August 2022, well above 4,200 points.
Separately, the cost of insuring exposure to a US debt default fell further on Tuesday, while longer-dated US Treasury yields fell, reflecting optimism about the temporary debt limit deal.
Nvidia Corp jumped 4.2% to a record, as the world’s most valuable chipmaker breached $1 trillion in market capitalization for the first time.
The Philadelphia SE Semiconductor index gained 1.0%, touching its highest level since February 2022 earlier in the session. The S&P 500 technology sector added 1.1%.
“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,” said Thomas Hayes, chairman at Great Hill Capital LLC.
At 12:22 p.m. ET, the Dow Jones Industrial Average was down 117.43 points, or 0.35%, at 32,975.91, the S&P 500 was up 3.47 points, or 0.08%, at 4,208.92 and the Nasdaq Composite was up 68.09 points, or 0.52%, at 13,043.78.
Data showed a higher-than-expected increase in consumer confidence in May, potentially supporting bets that the Federal Reserve may not be done with its rate-hiking regime.
The S&P 500 energy sector index fell 1.5%, tracking lower oil prices.
Tesla shares advanced 3.5%, extending Friday’s gains. Top boss, Elon Musk, arrived in China’s capital Beijing on Tuesday, for the first time in three years.
The S&P index recorded 20 new 52-week highs and 17 new lows, while the Nasdaq hit 81 new highs and 89 new lows.
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