The Dow Jones Industrial Average looked past a higher inflation print and rose 1% at 3 p.m. ET. Tech leaders gained while health care stocks fell. Federal debt ceiling negotiations appeared to take a positive turn ahead of Memorial Day.
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The proposed deal would raise the $31.4 trillion debt ceiling for two years while putting several spending caps in place. According to reports, a firm agreement between House Speaker Kevin McCarthy and the White House is just $70 billion away.
The S&P 500 added a strong 1.4% at the hour, while the Nasdaq took a clear lead with a 2.2% gain as it eyed a high last seen in August. Marvell Technology (MRVL) powered the continuing chip rally. Software stocks also rose on Workday‘s (WDAY) results. Cummins (CMI) spinoff Atmus Filtration (ATMU) popped nearly 12% in its trading debut on the NYSE. The company makes filtration parts for autos and trucks. The company priced an offering of 14.1 million shares at 19.50, at the midpoint of a proposed range of 18-21.
Volume fell on the NYSE and the Nasdaq compared to the same time on Thursday.
The small-cap Russell 2000 made a 1% gain while the growth-focused Innovator IBD 50 (FFTY) ETF gained 1.2%.
Crude oil rose less than 1% to trade at $72.47 per barrel. The yield on the benchmark 10-year Treasury note was flat at 3.81%.
Outside Dow Jones: Stocks Moving Today
Marvell surged after it reported earnings. Shares edged past a cup base buy point at 49.59 Thursday and gapped up to a 13-month high Friday, as seen on IBD MarketSmith charts.
Chip stocks and AI plays continued to rally, powered by a strong quarter and forecast from Nvidia (NVDA). Rival Advanced Micro Devices (AMD) hit a 20% profit target, while Intel (INTC) took back Thursday’s loss.
IBD Leaderboard play ASML (ASML) added to recent gains and is extended from a 683.28 buy point. Nvidia (NVDA), also on IBD Leaderboard, is seeing a bullish inside day at the hour. Taiwan Semiconductor (TSM) rose after Thursday’s breakout and is extended from its 95.92 buy point in a double-bottom base.
Among software leaders, Workday broke out of a cup base at 206.78 after fiscal first-quarter sales beat views. Outlook for the current quarter ending in July met Wall Street expectations. The enterprise software stock is in the 21st-ranked industry group, of 197 industries IBD tracks. The relative strength line, which is at a 52-week high, also shows support for the price action.
On IBD SwingTrader, Oracle (ORCL) continued to trade above the 50-day moving average. Shares are extended from a handle entry at 91.32.
Costco Wholesale (COST) rose even though fiscal Q3 earnings showed slowing sales while earnings missed views. The stock is clearing converged 50- and 200-day moving averages. Network giant and Dow Jones component Cisco Systems (CSCO) also cleared the 50-day line as it works on a flat base with an entry at 52.66.
Shares of Ford (F) rose in strong volume after Tesla (TSLA) CEO Elon Musk said 12,000 Tesla superchargers will be available to Ford starting in 2024. Ford stock rose above the 50-day line, while Tesla is trying to move above its 200-day moving average, which is currently just over 200.
Elsewhere, EV rival Nikola (NKLA) was on pace for a four-day losing streak as it faces possible delisting on the Nasdaq. NKLA is trading at an all-time low of 60 cents a share.
PDD (PDD) jumped more than 18% in heavy volume after earnings. The stock is trying to clear the 50-day line and remains in a deep correction.
The Personal Consumption and Expenditures Price Index, the Fed’s preferred gauge of inflation, rose 0.4% in April. The likelihood of a 25-basis-point hike in June went up to 64.2%, according to CME FedWatch.
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