Day Traders Diary

5/30/23

The major averages closed mixed once again as Congressional leaders get a tentative deal on raising the U.S. debt ceiling while the AI tech stocks continue to shine. The Dow Jones Industrial Average fell 50 points or 0.15%. The S&P 500 rose 7 pennies while the Nasdaq Composite added 41 points after opening 150 points higher.

President Joe Biden and House Majority Leader Kevin McCarthy reached an agreement to raise the debt ceiling and avoid a default over the weekend, with Congress set to vote on the legislation as early as Wednesday. Both Republican and Democratic support is needed for the proposed bill to pass.

The agreement comes just days before the so-called X date on Monday, which is the earliest date the Treasury Department has signaled the U.S. could default on debt obligations.

Despite the tentative agreement, obstacles remain on the path to passage for the compromise bill in the House amid growing opposition within the GOP. The markets are also keeping an eye on the Fed that may raise rates once again next month. Right now, the CME Group's FedWatch says there is a 68.8% chance of a rate hike in June.

The rally in the markets today was led by the AI techs like Nvidia which was upgraded at Bank of America, upping their price target to $500 per share from $450.

The new target implies upside of 28.4% from Friday's close. The Nasdaq was helped by a nearly 3% rally in Nvidia. Tesla also had a nice day thanks to comments from Barclays saying the stock is "set up well" for share gains over the long run.