Key Takeaways

  • U.S. equities ended mixed on Thursday, May 25, 2023 as Nvidia news lifted the Nasdaq and S&P 500 and concerns about a possible government default dragged down the Dow.
  • Nvidia said demand for its artificial intelligence products is "surging."
  • Dollar Tree becomes latest retailer to report theft is impacting profit.

U.S. equities ended mixed as tech stocks soared on Nvidia’s (NVDA) much better-than-expected quarterly results and outlook, while concerns about what would happen if an agreement to raise the federal debt ceiling isn't reached in time to avoid a U.S. default dragged down the Dow. The yield on the 10-year Treasury note climbed after Fitch put the U.S. credit rating on negative watch as the so-called X-date for a government default grew closer.

Nvidia (NVDA) shares jumped to an all-time high after the chipmaker reported “surging” demand for its artificial intelligence (AI) products. The news lifted shares of other stocks in the AI sector, including Advanced Micro Devices (AMD), Applied Materials (AMAT), and TSMC (TSM). Shares of Microsoft (MSFT), which has made a major commitment to AI, also gained.  However, Intel (INTC) shares sank 5.5% as booming sales for its rivals threaten to cut into its revenue. 

Ralph Lauren Corporation (RL) shares advanced after the high-end clothing retailer beat earnings forecasts as sales jumped in China. Shares of Synopsys (SNPS) rose on the software maker’s $300 million accelerated share repurchase agreement with Mizuho Markets Americas. 

Dollar Tree (DLTR) tumbled after the discount store chain missed profit estimates and reduced its full-year outlook because of losses from theft. American Eagle Outfitters (AEO) also cut its guidance, and shares plunged. Shares of Medtronic (MDT) dipped after the medical device manufacturer’s full-year earnings forecast was less than anticipated.

Illumina (ILMN) shares dropped after one of activist investor Carl Icahn’s nominees for the board won a seat at Thursday's shareholder meeting, ousting chair John Thompson. Drug maker stocks weighed on the Dow, with shares of Amgen (AMGN), Johnson & Johnson (JNJ), and Merck (MRK) all falling more than 1%.

Oil futures tumbled 3% after a Russian official said Moscow doesn’t expect OPEC+ members to make additional production cuts. Gold prices were down. The U.S. dollar was higher versus the euro, pound, and yen. Most major cryptocurrencies traded in positive territory.  

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