Dow Jones Rises Ahead Of Memorial Day As Debt Deal, Rate Hike Loom; Tesla Rival Faces Delisting

The Dow Jones Industrial Average looked past a higher inflation print and ended the trading day 1% higher. Tech leaders gained on Friday 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 1.3% at closing bell, while the Nasdaq took a clear lead with a 2.2% gain as it hit 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 11% 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, early data showed.

The small-cap Russell 2000 made a 1.1% gain  at 4 p.m. ET while the growth-focused Innovator IBD 50 (FFTY) ETF gained 1%.

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%.

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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 became extended from a 683.28 buy point. Nvidia, also on IBD Leaderboard, saw a bullish inside day. Taiwan Semiconductor (TSM) rose after Thursday’s breakout and was 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) pulled back slightly but 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 cleared converged 50- and 200-day moving average lines. 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 nearly 7% 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 tried to move above its 200-day moving average, which is currently just over the 200 stock price.

Elsewhere, EV rival Nikola (NKLA) fell more than 4% as it faces possible delisting on the Nasdaq. NKLA ended at an all-time low of 59 cents a share.

PDD (PDD) jumped more than 18% in heavy volume after earnings. The stock retook the 50-day line but remained 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 66.5%, according to CME FedWatch.

Please follow VRamakrishnan on Twitter for more news on the stock market today.

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