European shares rose on Friday, tracking the tail of an overnight rally on Wall Street, as chipmakers lifted the market and there were signs in Washington that politicians were reaching a deal on the U.S. debt ceiling.
Europe’s Stoxx 600 rose 0.5 percent, France’s Cac 40 gained 0.6 percent and London’s FTSE 100 opened 0.7 percent higher.
The move came a day after Nvidia announced its quarterly earnings far exceeded analysts’ expectations, fueled by a surge in demand for chips used to power artificial intelligence systems.
Nvidia shares rose 24% on the day, putting the company on track to become the first chipmaker with a market cap of more than $1 trillion. The gains spread to other artificial intelligence-related stocks, helping the tech-heavy Nasdaq Composite to end 1.7 percent higher. The benchmark S&P 500 rose 0.9%.
Meanwhile, U.S. President Joe Biden said late Thursday that White House officials were “making progress” in talks on the U.S. debt ceiling, as the deadline for an unprecedented government default loomed, rattling investors.
Contracts tracking Wall Street’s benchmark S&P 500 and the tech-heavy Nasdaq 100 were flat ahead of the New York open.
“While Nvidia is pumping up the hype across the market, I don’t know how much impact that will or should have if we go into a three-day weekend without a debt ceiling deal,” said Mike Zigmont, head of research and trading. Harvest volatility.
Earlier this week, credit ratings agency Fitch warned it could downgrade the country’s triple-A rating due to “brinkmanship” over the US debt ceiling.
Yields on U.S. Treasuries maturing in one month — closer to the date the U.S. government could run out of money — were at 5.8% on Friday, down from a high of 6.01% earlier in the week.
The policy-sensitive two-year yield rose 0.02 percentage point to 4.52%. The yield on the benchmark 10-year Treasury note was flat at 3.81%. Bond yields rise as prices fall.
Turkey’s lira fell to 20 per dollar for the first time, the latest sign of mounting pressure on the country’s economy ahead of Sunday’s runoff election. President Recep Tayyip Erdogan, who has led Turkey for two decades, is expected to win this weekend’s second round of voting.
Oil prices rose amid mixed information from OPEC+ members on future fuel production. International benchmark Brent crude rose 0.24% to $76.44 a barrel, while U.S. West Texas Intermediate crude rose 0.4% to $72.2.
This came after Russian President Vladimir Putin and the country’s deputy prime minister said further production cuts were unlikely at next month’s OPEC+ meeting.
Asian shares were mixed, with Hong Kong’s Hang Seng down 1.9%, while China’s CSI was flat.