Stock Market Today: Stocks Give Back Big Debt Ceiling Deal Gains

The major benchmarks opened solidly higher Tuesday after lawmakers announced a debt ceiling deal, but optimism faded into the close.

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(Image credit: Getty Images)

News that a debt ceiling deal was reached over the weekend sent stocks higher at the start of the holiday-shortened week, though optimism faded as the session wore on. 

But it wasn't only the debt ceiling in focus today. Nvidia (NVDA) continued its monumental rise – briefly passing a milestone that's rarely been met on Wall Street. Tesla (TSLA) made headlines, too, after CEO Elon Musk headed to China for the first time in years.  

Over the Memorial Day holiday weekend, House Speaker Kevin McCarthy and the White House agreed to a deal that will suspend the debt ceiling through January 2025, while keeping non-defense spending unchanged next year and limiting increases to 1% in 2025. The agreement also incorporates work requirements for certain food stamp recipients. 

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The bill now heads to Congress where lawmakers will debate, and hopefully pass, the bill ahead of the June 5 deadline when the U.S. is projected to run out of money to pay its bills. 

"It won't take a lot to disrupt this debt deal, but optimism remains that Congress won't mess with putting the economy at risk of an unnecessary catastrophe," says Edward Moya, senior market strategist at currency data provider OANDA. "Right now, it feels like we have a one run lead and are at the seventh-inning stretch."

Anxiety over whether or not the deal will gain enough support in Congress ahead of the default deadline had the major market indexes giving back early gains. The Nasdaq Composite, which was up 1.3% at its intraday peak, ended the day with a more modest 0.3% increase at 13,017. Meanwhile, the S&P 500 finished flat at 4,205 and the Dow Jones Industrial Average was 0.2% lower at 33,042.

Nvidia briefly hits a $1 trillion market cap

As for single-stock news, Nvidia was a notable gainer, building on last week's AI-induced momentum. Specifically, the chipmaker climbed almost 25% last week after it said demand for artificial intelligence will result in record revenue this quarter. 

Today's gains came after Nvidia unveiled its new supercomputer over the weekend. "We believe Nvidia's accelerated computing GPUs stand out to be the biggest beneficiary in an AI-driven world and is the only way for cloud customers and broader enterprise space to create successful large language models at this time," says CFRA Research analyst Angelo Zino (Buy). 

This sent NVDA up 7% at one point today, which briefly brought its market capitalization north of $1 trillion for the first time ever. This impressive milestone has been hit by just a handful of U.S. companies, with Apple (AAPL), Alphabet (GOOGL), (AMZN) and Microsoft (MSFT) the only firms currently in the trillion-dollar club. NVDA narrowly missed closing above the key psychological level, ending today up 3.0% at $401.11, with a market value of $992 billion.

Tesla, meanwhile, rose 4.1% today as CEO Elon Musk headed to China for his first visit in roughly three years. "While the geopolitical tensions between the U.S. and China are increasing, Tesla finds itself in a tight wire act to balance its success and production within China which remains a vital market on both the supply and demand front," says Wedbush analyst Daniel Ives (Outperform, or the equivalent of a Buy). Playing nice with Beijing is key to ensuring there are "no disruptions to Tesla's expansion and tentacles within China for the coming years as this remains the #1 EV market in the world," the analyst adds.

Stocks picked by AI to outperform

Big swings like we saw today are not for faint-of-heart investors, but they can be exciting for stock pickers. Many tactical traders have been homing in on the year's best momentum stocks as one way to play what's hot right now, but another approach leverages artificial intelligence. 

Danelfin is an analytics platform that uses AI to analyze hundreds of fundamental, technical and sentiment data points per day for 1,000 U.S.-listed shares and 600 European-listed firms. Danelfin's algorithms then generate stock picks that it views as highly likely to outperform the market over the next 30 to 90 sessions. 

So, what does Danelfin say are the best stocks to buy now? Read on as we take a look at the platform's latest high-scoring stocks

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Karee Venema
Contributing Editor,

With over a decade of experience writing about the stock market, Karee Venema is an investing editor and options expert at She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at Schaeffer's Investment Research. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.