Nvidia Surges Late on Blowout Earnings and Guidance; Other AI Stocks Rally.

Overnight, Dow Jones futures sank marginally, while S&P 500 futures gained and Nasdaq futures surged. Nvidia (NVDA) soared late on brisk artificial intelligence demand for its high-powered processors, boosting a number of semiconductor and AI bets. The United States’ credit rating is under peril as a result of the debt-ceiling dispute, according to Fitch.

ELF Beauty (ELF), Snowflake (SNOW), UiPath (PATH), and Splunk (SPLK) were among top earners.

The stock market rise has stalled for the second day in a row, despite continued debt-ceiling discussions. The Nasdaq remains above important levels, while the S&P 500 has returned to its sideways range after falling from 2023 highs. The Dow Jones has reached its 200-day moving average and is now down for the year.

In the present situation, investors should be cautious and prepared to cut losses swiftly.

Nvidia is on the IBD Leaderboard, while ELF is on the Leaderboard watchlist. SNOW is a stock on the IBD 50.

AAA Credit Rating Under Fire Due to Default Risks

Fitch Ratings downgraded the US government’s AAA credit rating late Wednesday. Fitch identified “increased political partisanship” as a barrier to achieving an agreement to raise or suspend the debt ceiling. “The brinkmanship over the debt ceiling, failure of US authorities to meaningfully address medium-term fiscal challenges that will lead to rising budget deficits and a growing debt burden signal downside risks to US creditworthiness,” the credit ratings agency noted.

Negotiators for the White House and House Republicans resumed debt-ceiling negotiations on Wednesday. Without an agreement to extend the debt ceiling, the country will default in early June.

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