US stocks rose on Thursday as a surge in companies linked to the artificial intelligence frenzy outweighed broader market concerns such as a US debt default.
The S&P 500 gained 0.9%, while the tech-heavy Nasdaq 100 gained 2.5%, following a bullish sales forecast from Nvidia.
Nvidia shares soared 24% after the company's AI forecast surprised even the most bullish Wall Street analysts, propelling the company to the brink of a $1 trillion market cap.
It's yet another indication that investors are willing to pile into promising tech stocks, despite growing concerns about China's economy and a potentially disastrous US debt default. Fitch Ratings has warned that the United States' AAA rating is under threat, but it remains optimistic that politicians will reach an agreement before time runs out.
Treasury bill yields rose slightly as investors continued to demand a premium on securities seen as most vulnerable to nonpayment if the government's borrowing capacity is depleted. The squabbling in Washington adds to the risks that Federal Reserve officials are assessing as they consider pausing interest rate increases.
Following the release of mixed data on Thursday, including a higher revised first-quarter GDP and fewer-than-expected jobless claims, traders are now fully pricing in another quarter-point hike within the next two policy meetings.