U.S. stocks are ticking higher and approaching another record. The S&P 500 rose 0.2% early Wednesday and neared the all-time high it set a couple weeks ago. The Dow Jones Industrial Average added 127 points after setting its own record the day before, while the Nasdaq composite climbed 0.3%. Technology stocks swung back upward. Advanced Micro Devices rallied after its CEO said the chip company is expecting better than 35% annual compounded growth in revenue over the next three to five years. Nvidia, the dominant player in chips used for artificial-intelligence technology, also rose.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
Wall Street is on track to open higher Wednesday with an end to the U.S. government shutdown appearing closer, and technology stocks appeared to regain their footing after wild swings this week.
Futures for the S&P 500 rose 0.4% while futures for the Dow Jones Industrial Average were up 0.3%. Futures for the technology-heavy Nasdaq index rose 0.6%.
The longest federal government shutdown in U.S. history could be over as soon as Wednesday, but not without having tripped up an economy already under stress.
More than a million federal workers haven’t been paid since Oct. 1. Thousands of flights have been canceled, a trend that’s expected to continue this week even if the U.S. government re-opens. Many food aid recipients have seen their benefits interrupted.
The Congressional Budget Office estimated that a six-week shutdown will reduce growth in this year’s fourth quarter by about 1.5 percentage points.
Additionally, the government shutdown cut off the flow of economic data on unemployment, inflation, and retail spending that the Federal Reserve depends on to monitor the economy’s health. That could mean that the Fed will not deliver a third interest rate cut at its December meeting, which was widely expected before the shutdown.
Fed Chair Jerome Powell said the Fed’s interest-rate setting committee is deeply divided over whether to reduce its key rate, partly because the economy’s health is unusually cloudy.
The technology sector appears to have settled down after recent sell-offs, with concerns growing that share prices have grown too expensive. Nvidia, up 44% this year, is down 5% this week.
CoreWeave, a close partner to Nvidia, tumbled 17% Tuesday after its expectations for the year ahead disappointed AI investors who have grown used to red-hot growth. The company went public in March. Its shares are up 3% early Wednesday.
Advanced Micro Devices, whose shares have doubled this year, rose 5% overnight after the chipmaker forecast enormous revenue growth in its data center business due to AI demand.
A big question has been whether investors will push the craze for AI stocks further.
Their sensational growth has been one of the top reasons the U.S. market has hit records despite a slowing job market and high inflation. But their prices have shot so high that critics say they’re reminiscent of the 2000 dot-com bubble, which ultimately burst and dragged the S&P 500 down by nearly half.
Elsewhere, in Europe at midday, France’s CAC 40 Germany’s DAX each surged 1.2%. Britain’s FTSE 100 was unchanged.
In Asian trading, Japan’s benchmark Nikkei 225 added 0.4% to finish at 51,063.31.
Hong Kong’s Hang Seng rose 0.9% to 26,922.73, while the Shanghai Composite edged down less than 0.1% to 4,000.14.
Australia’s S&P/ASX 200 shed 0.2% to 8,799.50. South Korea’s Kospi added 1.1% to 4,150.39.
In energy markets, benchmark U.S. crude declined 65 cents to $60.39 a barrel. Brent crude, the international standard, lost 66 cents to $64.50 a barrel.
Politics8 years ago