Nvidia Debt Talks Exceed $1 Trillion Nasdaq Buttercup on Fire

The US stock market was strong at the start of the open thanks to relief from the debt ceiling talks and Nvidia’s surge. The Nasdaq index of technology stocks crossed the 13,000 mark.

Treasury yields also fell. At the start of the open, 10-year bonds were trading at 3.7% and 2-year bonds at 4.5%. 1 month Treasury yields are down 50bp from the peak. Crude oil fell below $70 WTI, and natural gas fell. Gold and Bitcoin were on the rise.

Last weekend, US politicians tentatively reached a debt ceiling deal, which had a positive effect on market sentiment. The White House and Republicans agreed to raise the debt ceiling and freeze spending over the next two years. The unused COVID-19 assistance fund has been reclaimed, and the age at which food stamps (food and beverage assistance coupons) can be received has been raised from 50 to 55. However, the clean energy tax credit will be maintained. There will be a vote on the next bill in the House Steering Committee on the 31st.

The Case-Shiller Home Price Index for March was down 1.1% from a year earlier. However, the reduction was less than expected. Month-on-month growth in house prices was also higher than expected. Commercial real estate in the United States is falling, but house prices appear to be falling less.

Nvidia surpassed $1 trillion in market cap that day. For the first time among semiconductor stocks, it ranked 5th by market cap following Apple, Microsoft, Tesla, and Amazon. Shares rallied after last week’s earnings report as AI expectations rose.

Nvidia CEO Jensen Huang raised the mood even more by unveiling a new AI supercomputer platform (DGX GH200) at the Computex Expo in Taiwan. The ‘Nvidia Helios’ supercomputer using this platform will also be released online within the year.

Tesla was strong thanks to Elon Musk’s visit to China. “We are ready to expand our business in China,” Musk said during a meeting with Chinese Foreign Minister Qin Gang.

Various reports also came out on Wall Street. Jefferies upgraded its rating on Ford from Neutral to Buy. Our price target is $16. This is the reason confidence was confirmed at the IR (investment briefing session) and the operating profit guidance was set high at 10%.

BOA issued a ‘buy’ opinion on a Charging Point for electric vehicle charging companies. It’s an analysis that the stock is undervalued despite being a company that has taken advantage of industry changes and regulatory tailwinds. Ross upgraded its rating on Boston Beer to Buy, citing expectations for summer beer demand. Atlantic issued an ‘Overweight’ investment opinion on Coinbase, and JPMorgan issued an ‘Overweight’ opinion on Kenview, a company listed separately from Johnson & Johnson.

New York = Reporter Jeong So-ram/Shin In-gyu ram@hankyung.com