DEVELOPING… Story will be updated as new information can be verified. Updated 4 times
NEW YORK (AP) — Stocks rose in morning trading on Wall Street Friday, led by more gains in technology stocks as another chipmaker reported strong demand related to artificial intelligence.
The S&P 500 rose 0.7%. The Dow Jones Industrial Average rose 240 points, or 0.7%, at 33,003 as of 10:08 a.m. Eastern and the Nasdaq rose 1%.
Technology stocks were the doing much of the heavy lifting for the benchmark S&P 500. Marvell Technology surged 25% 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.
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 two-year 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.
The threat of the U.S. defaulting on its debt comes amid lingering concerns about a recession on the horizon amid inflation’s grip on businesses and consumers. A key measure of inflation that is closely watched by the Federal Reserve ticked higher than economists expected in April. The report also showed that consumer spending remains strong.
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 mid-June. 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.
Bond yields had been slipping just prior to the latest inflation data, but rose following the report. The yield on the 10-year Treasury, which helps set rates for mortgages and other important loans, rose to 3.82% from 3.78% just before the report was released.
Movement for the two-year Treasury yield, which tends to track expectations for Fed action, was more extreme. It jumped to 4.58% from 4.49% prior to the report.
Markets in Europe and Asia gained ground.
Elaine Kurtenbach and Matt Ott contributed to this report.
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