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Price rally on the Nasdaq: AI boom causes price jumps in the chip sector
Photo: JOHN MOORE/ AFP
Price rally on the Nasdaq: The boom in artificial intelligence applications and the jump in sales and prices at tech giant Nvidia have ensured that investors are turning to tech stocks again. A rapprochement in the debt dispute further lifts the mood on the market. The Dow Jones index of standard stocks closed one percent higher on Friday at 33,093 points. The technology-heavy Nasdaq advanced 2.2 percent to 12,975 points. The broad-based S&P 500 gained 1.3 percent to 4205 points.
Nvidia and Marvell in demand for AI
On the corporate side, after the euphoria surrounding the semiconductor company Nvidia <from the previous day, Marvell Technology was now in focus. The chip developer, which published its first-quarter figures after the close of the US stock market the evening before, also expects a strong AI-related increase in sales, like Nvidia. The stock recently jumped 28 percent to its highest level in over a year. Other chip stocks such as NXP Semiconductors and Micron benefited from this and rose in price by around five percent each.
Other semiconductor companies were also in demand. The Philadelphia SE Semiconductor Index rose by more than six percent.
Rapprochement in the debt dispute
After several rounds of negotiations, President Joe Biden and Republican Congressman Kevin McCarthy are making progress in the struggle to raise the government's debt ceiling of $31.4 trillion for two years. At the same time, expenditure on most items is to be limited. "The market is responding really well to an anticipated deal and it looks like the framework for the agreement is close to implementation and we're seeing some relief rally," said David Sadkin of wealth advisor Bel Air Investment Advisors.
The uncertainty has been driving the stock market for days, because without an agreement, the United States is threatened with insolvency from the beginning of June, according to the Treasury Department in Washington.
Bond yields rise after inflation data
Investors concluded from fresh US inflation data that the end of interest rate hikes in the US has not yet come and increased their bets on them in the futures markets. That the risks are still high is shown by the development of personal consumer spending - a measure of inflation that the Fed pays particular attention to. This does not take into account the fluctuating food and energy costs. This so-called PCE core index rose slightly from 4.6 to 4.7 percent in April. The Fed is aiming for an inflation rate of two percent.
In bond markets, yields rose after the data was released. The yield on ten-year US Treasuries climbed to 3.808 percent from 3.77 percent previously. The yield on ten-year German government bonds rose by five basis points to 2.54 percent. Next week's euro inflation data is likely to set the direction for yields and future actions by the European Central Bank (ECB).
Ford benefits from Tesla deal
Shares of Ford gained more than six percent. Ford and Tesla announced a partnership to charge electric vehicles. According to the agreement, Ford electric cars will have access to Tesla's more than 12,000 fast-charging stations (Superchargers) in North America. In addition, future electric models from Ford are to adopt the Tesla plug. This would double the number of fast-charging stations available to Ford electric cars. Tesla shares were up almost five percent.
Dax recovers - important decisions after Pentecost
The hope of an early agreement in the US debt dispute had given the Dax a conciliatory end to the week on the Friday before Pentecost. The Dax closed 1.20 percent higher at 15,983.97 points on Friday, curbing its weekly loss to 1.8 percent. However, the approaching "Day X" in the US debt dispute could put the financial markets under pressure again in the new week.
Next Friday, the monthly US labor market report will be the second important weekly event on the agenda - it is a decisive factor for the interest rate policy of the US Federal Reserve. According to the minutes of the most recent interest rate meeting at the beginning of May, there are currently no clear monetary policy stance.
Trading on Whit Monday in Germany
The German stock market is traded on Whit Monday, but not on a number of other stock exchanges. New York and London, among others, are celebrating a long weekend, and important economic data and company appointments are also not on the agenda.
On Tuesday, the news situation is also still comparatively calm. Among other things, the quarterly figures of the MDax-listed commercial real estate specialist Aroundtown, as well as data on economic and industrial confidence in the eurozone and consumer confidence in the USA have been announced. This will be followed in the middle of the week by the quarterly report of the financial services provider Wüstenrot & Württembergische, purchasing managers' indices from the Chinese market, which is important for Germany, and consumer prices from Germany.
Thursday at the latest will be dominated by the US debt dispute - regardless of other purchasing managers' indices and the ADP report on the employment development of the US private sector, which is considered an important indicator for the government's labour market report on Friday.
Bitcoin at $26,000
The digital currency Bitcoin has continued to soar and was last quoted at 26,484 US dollars. In November 2022, the currency had plummeted from over $21,000 to around $16,000 amid the collapse of crypto exchange FTX. A year earlier, Bitcoin reached a record high of $69,000.
A few weeks ago, some OPEC countries caught investors off guard with production cuts just days before an official meeting.
With news agencies