Friday, June 2, 2023

Wall Street closes with mixed results a week of nerves over the debt in the US.

Wall Street closed with accumulated losses in the Dow Jones a week of nervousness due to negotiations on the debt ceiling in the US, while the Nasdaq index rose strongly driven by future opportunities for the artificial intelligence (AI).

He Dow Jones loses 1% in the week, which contrasts with the Profits of the other two main indices, which have benefited from the good performance of companies in the technology sector in recent days: the Nasdaq index rises 2.51% and the S&P 500, 0.32%.

In the last few hours, hopes have risen that an agreement will be reached soon to raise the debt ceilingbut at the close of the markets and before the Monday holiday of Memorial Day, there was still no light at the end of the tunnel in the negotiations between the White House and Republican legislators.

“The debt ceiling was in the spotlight this week,” Wells Fargo analysts agreed in a note, noting that as long as there is a risk that the Government defaults, there will be uncertainty about the near-term economic outlook, although the latest data suggests “resiliency”.

However, the technological sectorespecially after the processor manufacturer Nvidia reported a strong quarterly increase in its profits and signaled its expectations of greater demand due to the development of AI, in which more and more companies are investing.

nvidia is one of the winners of the week, with an accumulated revaluation of 24%, and one of the leading companies in the new “rally” of the technology sector, which has advanced more than 2% against the losses of the vast majority of sectors.

In spite of everything, analysts remember that once this crisis due to the US debt is overcome -which the Fitch agency has put in “negative observation”– the markets will return to what has been their main concern in recent months: the path of the Federal Reserve’s interest rates.


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