Tech leads more gains
NEW YORK >> Technology stocks powered solid gains for Wall Street on Friday after another chipmaker reported strong demand related to artificial intelligence.
The upbeat finish to the week for major indexes comes amid lingering anxiety over persistently high inflation, the risk of a U.S. debt default and broadly weak corporate earnings.
The S&P 500 rose, 54.17 points, or 1.3% to close at 4,205.45. It notched a small gain for the week and is in the green as May nears its close.
The Dow Jones Industrial Average rose 328.69 points, or 1%, to 33,093.34.
The tech-heavy Nasdaq notched the biggest gains, rising 277.59 points, or 2.2%, to 12,975.69. The index rose 2.5% for the week as artificial intelligence became a big focus for investors.
Marvell Technology surged a record-setting 32.4% after the chipmaker said it expects AI revenue in fiscal 2024 to at least double from the prior year. That follows Thursday’s report from fellow chipmaker Nvidia, which gave a big forecast for upcoming sales related to AI.
The revolutionary AI field has become a hot issue. Critics warn that it is a potential bubble, but supporters supporters say it could be the latest revolution to reshape the global economy. The nation’s financial watchdog, the Consumer Finance Protection Bureau, said it’s working to ensure that companies follow the law when they’re using AI.
Wall Street remains focused on Washington and ongoing negotiations for a deal to lift the U.S. government’s debt ceiling and avert a potentially calamitous default.
Officials said President Joe Biden and House Speaker Kevin Mccarthy were narrowing in on a twoyear budget deal that could open the door to lifting the nation’s debt ceiling. The Democratic president and Republican speaker hope to strike a budget compromise this weekend.
Wall Street and the broader economy already had a full roster of concerns before the threat of the U.S. defaulting on its debt became sharply highlighted on the list.
“Should we avoid that, and it appears that is a high probability, we come back to a trajectory of a slowing economy, still-toohigh inflation and restrictive monetary policy,” said Bill Northey, senior investment director at U.S. Bank Wealth Management.
A key measure of inflation that is closely watched by the Federal Reserve ticked higher than economists expected in April. The persistent pressure from inflation complicates the Fed’s fight against high prices.
The central bank has been aggressively raising interest rates since 2022, but recently signaled it will likely forgo a rate hike when it meets in midjune. The latest government report on inflation is raising concerns about the Fed’s next move.
Wall Street is now leaning slightly toward the potential for another quarter-point rate hike in June, according to CME’S Fedwatch tool. The Fed has already raised its benchmark interest rate 10 times in a row.
The Fed faces a difficult choice at its next meeting, wrote Brian Rose, senior US economist at UBS, in a report.
“Inflation is too high but further rate hikes could push the economy into recession,” he said.
— The Associated Press