US stocks trade mixed after debt ceiling deal and ongoing AI frenzy
The debt ceiling deal would raise the debt ceiling until January 2025 and includes various spending cuts and deficit reduction measures.
Reuters / Brendan McDermid
- US stocks were mixed on Tuesday after a debt ceiling deal was reached in Congress before the upcoming deadline.
- The deal still needs to be voted on in the House and Senate chambers of Congress.
- Investors continue to bid up artificial intelligence stocks like Nvidia, which reached a $1 trillion valuation.
US stocks traded mixed on Tuesday after House Speaker Kevin McCarthy and President Joe Biden reached a debt ceiling deal over the weekend.
The deal would raise the debt ceiling until January 2025 and includes various spending cuts and deficit reduction measures, including keeping non-defense discretionary spending roughly flat in 2024, with only a 1% increase in 2025.
Part of the deal includes new work requirements for recipients of food stamps, and some IRS funding will be clawed back under the agreement. The deal will allow the US to avoid the fast-approaching "X-date," in which the Treasury runs out of money to pay its bills. Treasury Secretary Janet Yellen estimates that day could come on June 5.
The deal still has to be voted on and passed in the House and Senate chambers of Congress before going to Biden for his signature.
Meanwhile, artificial intelligence stocks continued to jump on Tuesday, with shares of Nvidia up 4%, reaching a $1 trillion valuation for the first time ever.
Here's where US indexes stood shortly after the 9:30 a.m. ET opening bell on Tuesday:
- S&P 500: 4,226.19, up 0.49%
- Dow Jones Industrial Average: 33,077.56, down 0.05% (15.78 points)
- Nasdaq Composite: 13,118.34, up 1.10%
Here's what else is happening this morning:
- Nvidia stock surged 4% after the company unveiled new artificial intelligence products over the weekend, including the DGX Gh200 AI Supercomputer.
- Microsoft's market capitalization could surge by $300 billion thanks to the rise of AI and its exposure to ChatGPT, according to Wedbush.
- Wharton professor Jeremy Siegel doesn't see the mania around AI stocks as a bubble — and said it's impossible to predict where these mega-cap tech stocks will peak.
- Steve Cohen's Point72 fund likely scored a swift $100 million gain on its Nvidia stock over the past two months.
- Elon Musk is once again ringing the alarm on the US real estate sector. "Commercial real estate is melting down fast. Home values next," the Tesla and SpaceX chief tweeted on Monday.
In commodities, bonds and crypto:
- West Texas Intermediate crude oil fell 2.77% to $70.66 per barrel. Brent crude, oil's international benchmark, dropped 2.92% to $74.82.
- Gold rose 1.59% to $1,975.30 per ounce.
- The yield on the 10-year Treasury fell 7 basis points to 3.74%.
- Bitcoin rose 0.78% to $27,962, while ether jumped 1.10% to $1,913.