European stocks rose on Friday, catching the tail end of an overnight rally on Wall Street as chipmakers boosted markets and signs emerged from Washington that politicians were nearing a US debt ceiling agreement.
The regional Stoxx 600 in Europe rose 0.5%, the Cac 40 in France added 0.6% and the FTSE 100 in London opened 0.7%.
The moves come a day after Nvidia announced that its quarterly earnings far exceeded analysts’ expectations, buoyed by growing demand for chips used in generative artificial intelligence systems.
Nvidia shares jumped 24% that day, putting the company on track to become the first chipmaker to be valued at more than $1 billion. The rally spread to other AI-related stocks, helping the tech-heavy Nasdaq Composite finish 1.7% higher. The benchmark S&P 500 index rose 0.9%.
Meanwhile, US President Joe Biden signaled on Thursday evening that White House officials were “making progress” in negotiations over the US debt ceiling, as the looming deadline of an unprecedented default of the government exercised the nerves of investors.
Contracts that track Wall Street’s benchmark S&P 500 and those that track the tech-heavy Nasdaq 100 were both flat ahead of the New York open.
“While Nvidia is generating hype in the market, I don’t know how much it will or should matter if we go into the three-day weekend without a debt cap agreement,” Mike said. Zigmont, head of research and trading at Harvest Volatility.
Earlier in the week, credit rating agency Fitch warned it could downgrade the country’s triple-A rating due to “clarity” over the US debt limit.
The yield on Treasuries maturing in a month – close to when the US government could run out of money – was 5.8% on Friday, after slipping from a high of 6.01% earlier in the week.
The yield on two-year policy-sensitive notes rose 0.02 percentage points to 4.52%. The yield on the benchmark 10-year note remained stable at 3.81%. Bond yields rise as prices fall.
The Turkish lira fell to 20 against the US dollar for the first time, the latest sign of mounting pressure on the country’s economy ahead of Sunday’s run-off election. President Recep Tayyip Erdoğan, who has ruled Turkey for two decades, is expected to win the second-round vote this weekend.
Oil prices rose following mixed messages from OPEC+ member states on future production of the fuel. Brent crude, the international benchmark, rose 0.24% to $76.44 a barrel, while West Texas Intermediate, the US equivalent, rose 0.4% to $72.2.
Russian President Vladimir Putin and the country’s Deputy Prime Minister had said further production cuts were unlikely at next month’s OPEC+ meeting.
Asian stocks were mixed, with Hong Kong’s Hang Seng index falling 1.9% while China’s CSI was flat.
