US: Stocks finish higher on Walmart earnings, AI optimism

ALL three major US stock-market indexes closed higher on Thursday following better-than-expected earnings results for Walmart and optimism over the future profitability of artificial intelligence (AI).

“Everybody’s really excited about the potential for artificial intelligence and what that could mean for productivity,” Tom Cahill from Ventura Wealth Management told AFP on the day ChatGPT announced an app-based version of its popular AI assistant.

“And so I think that’s, to a large extent, that’s what’s driving the technology stocks higher,” he added.

The tech-rich Nasdaq Composite Index ended the day up more than 1.5 per cent at 12,688.84.

The broad-based S&P 500 gained 0.9 per cent to 4,198.05, while The Dow Jones Industrial Average finished up 0.3 per cent to 33,535.91.

Walmart stock finished the day up more than 1.3 per cent on the back of revenues that beat estimates and improved annual guidance.

There was also optimism Thursday around the state of talks to lift US borrowing limits and stave off a catastrophic debt default, with Republican House speaker Kevin McCarthy suggesting a vote on the issue could be possible as early as next week.

“We’re not there – we haven’t agreed to anything yet – but I see the path that we could come to an agreement,” he said in his most upbeat assessment yet of the standoff over the debt ceiling between Republicans in Congress and Democratic President Joe Biden.

“I think we have the structure now and everybody’s working hard,” he added.

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But the optimism in Congress hasn’t fully filtered through to the financial markets, according to Cahill from Ventura Wealth management.

Despite better-than-expected corporate earnings, debt ceiling talks and talk of another interest-rate hike by Fed officials this week have been “weighing on markets,” he said.

“I think investors are confused,” he added. AFP