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Wall Street trailed global markets slightly higher early Friday, buoyed by optimism that Congress and the president will strike an agreement to open a vote for lifting the US government debt ceiling and avoid a potential disastrous omission.
Futures for the Dow Jones Industrial Average and the S&P 500 each rose about 0.2% before the bell.
Officials said President Joe Biden and House Speaker Kevin McCarthy were approaching a two-year budget deal that could open the door to lifting the country’s debt ceiling. The Democratic president and Republican speaker I hope to reach a budget compromise this weekend.
A two-year deal would raise the debt limit before then, after the 2024 presidential election. As the price for raising the legal debt limit, Republicans have demanded cuts that Democrats oppose.
US markets continue this week to worry that Washington will run out of cash to pay its bills by June 1, unless Congress allows it to borrow more.
The widespread expectation is that a compromise will come before it is too late, as has happened dozens of times before, because a failure would probably be terrible for the economy.
Fitch said late Wednesday that it could downgrade the US government’s AAA rating, though it said it still expects a resolution before the US Treasury runs out of cash.
New consumer data will also be released on Friday, which is getting a lot of attention due to high inflation.
In premarket trading on Friday, shares of Marvell Technology were up 17% after the chipmaker said it expects AI revenue to at least double from the previous year in fiscal 2024 and continue rapid growth. Marvell’s rise helped push the tech-heavy Nasdaq index 0.4% higher.
On Thursday, the S&P 500 then gained 0.9% chip maker Nvidia gave a monster forecast for upcoming sales as it capitalizes on the tech world’s rush to AI. The Nasdaq rose 1.7%, while the Dow Industrials fell 0.1%. Nvidia shares rose more than 24% on Thursday.
Shares of other chip makers also moved higher after Nvidia described a race by its customers to put AI into every product, service and business process. Marvell rose more than 7% on Thursday.
The AI field has become so hot that critics warn of a potential bubble, while supporters say it could be the latest revolution to reshape the global economy.
While no one is questioning AI’s potential, valuations seem to have outpaced themselves and it could soon be time for a correction, Swissquote’s Ipek Ozkardeskaya said in a commentary.
The enthusiasm spilled over to Asia, where the Nikkei 225 in Tokyo gained 0.7% to 31,019.61. In Seoul, the Kospi rose 0.2% to 2,558.81, aided by a 2.2% increase in the share price of Samsung Electronics, South Korea’s largest company.
The Shanghai Composite Index rose 0.4% to 3,212.50, while the Sydney S&P/ASX 200 was also up 0.2% to 7,154.80.
In Europe, the German DAX was up 0.4% by midday, while the Paris CAC 40 was up 0.5% and the UK FTSE 100 was up 0.3%.
On another trading Friday, US benchmark crude reversed an early pullback, rising 67 cents to $72.50 a barrel in electronic trading on the New York Mercantile Exchange. It fell $2.51 to $71.83 a barrel on Thursday.
Brent crude, the international standard, rose 57 cents to $76.75 a barrel.
The US dollar fell from 140.07 yen to 139.73 Japanese yen. The euro rose from $1.0726 to $1.0752.
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Kurtenbach reported from Bangkok; Ott reported from Silver Spring, Md.
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