US shares mixed, Nvidia surge offsets jitters over debt ceiling vote

STORY: U.S. stocks saw mixed trading on Monday.

Worries remain over opposition to the deal to raise the debt ceiling. But tech shares were boosted by Nvidia as the chipmaker eclipsed $1 trillion in market value at one point during the session.

The Dow dropped nearly 2-tenths of one percent, the S&P 500 closed flat and the Nasdaq rose three tenths.

Over the weekend, U.S. President Joe Biden and Republican House of Representatives Speaker Kevin McCarthy agreed to a two-year-deal lifting the debt ceiling and capping some federal spending.

On Tuesday, McCarthy said the deal should be "easy" for Republicans to vote for and was likely to pass. However, some right-wing Republicans said they opposed the bipartisan measure.

CFRA Research Chief Investment Officer Sam Stovall said he thinks the bill could face a bumpy path before eventual passage.

"We don't have an agreement that is on paper with the debt ceiling. I think that more drama could be injected that maybe we actually have the first pass at Congress not be approved because the fringe parties want to make sure that their voices are heard. But we do think that the the debt situation will resolve itself by June 5th. Doesn't mean, however, that the headwinds have turned into simply a light breeze, because now we have to focus on the the FOMC meeting in the middle of June and still the possibility of recession sometime in the third quarter. So I think investors will still be sitting on their hands."

Nvidia Corp pared gains after setting a record high as the company anticipates a surge in demand for its AI chips that power chatbot sensation ChatGPT. It finished 3-percent higher.

Only four of the S&P 500's 11 sectors were higher, while declining stocks outweighed advancing shares on both the S&P 500 and Nasdaq.