S&P 500 jumps nearly 1% Thursday for highest close since August as traders hope for debt ceiling resolution: Live updates

Stocks closed higher for a second straight day.

The S&P 500 added 0.9%, while the Nasdaq Composite gained 1.5%. The Dow finished up 0.3% after trading down for much of the session.

— Alex Harring

There are eerie parallels between the recent performance of the Nasdaq Composite Index and its behavior in the aftermath of the Tech/Media/Telecom bubble that topped out in March 2000, Wolfe Research said in a note Thursday.

"Rallies following Nasdaq's peak in March 2000 were not sustained as breadth continued to deteriorate," analyst led by Chris Senyek wrote. As was the case then, sales and earnings at the largest tech stocks leading the market "won't escape the upcoming recession. As such, our sense remains that it won't be different this time."

The Nasdaq Composite is ahead almost 21% year-to-date in 2023 versus almost 9% for the S&P 500 and less than 1% for the Dow.

— CNBC's Michael Bloom contributed reporting

Citi listed Facebook-parent company Meta Platforms as the top pick in the North America internet segment, thanks to strong ad products and further investment into language learn models.

"We highlight Meta here, our top pick, with newer ad products like Advantage+, Click-to-Message, and Sponsored Reels delivering ROAS above pre-IDFA levels as engagement ramps," Citi analyst Ronald Josey wrote in a Thursday note.

Meta is set to gain further from a recovery in revenue from ads for internet companies, Josey said, especially as more volatile trends stabilize. Meta stock has been on fire so far this year with a 103.5% gain.

— Brian Evans

Artificial intelligence tailwinds could provide a significant lift to profit margins over the next decade, according to Goldman Sachs.

"Artificial intelligence represents the biggest potential long-term support for profit margins," the Wall Street firm said in a recent note to clients. "Our economists' productivity estimates suggest AI could boost net margins by nearly 400 bp over a decade."

Goldman forecasts that widespread adoption should boost U.S. productivity growth by 1.5 percentage points annually over the next decade.

"Based on the historical relationship between productivity growth and corporate profitability, this boost could lift S&P 500 net profit margins by roughly 4 pp over that decade, holding all else equal," Goldman said.

Despite these nearer-term tailwinds, Goldman noted that uncertainties surrounding government policy and widespread adoption linger, denting its ability to project the longer-term impacts of AI on corporate profits.

— Samantha Subin

Advancers at the New York Stock Exchange held a slight advantage over decliners with less than one hour left of trading. About 1,500 NYSE-listed names were higher, while 1,300 others declined.

— Fred Imbert

Longtime investor Carl Icahn admitted to the Financial Times that he made a mistake by betting against the market, which cost him billions of dollars.

The activist investor has lost nearly $9 billion in a bearish bet or hedging position that stretched back to 2017, according to the FT's analysis based on regulatory filings.

"I've always told people there is nobody who can really pick the market on a short-term or an intermediate-term basis," Icahn told the FT. "Maybe I made the mistake of not adhering to my own advice in recent years."

— Yun Li

The S&P 500 and Nasdaq Composite stayed up as investors entered the final hour of trading.

The S&P 500 added 0.4%, while the Nasdaq was on pace to finish 1% higher. The Dow was down 0.2%.

— Alex Harring

Consumers are all about spending on essentials and finding value, which helped Walmart's latest earnings, Telsey Advisory CEO Dana Telsey told CNBC. The big box retailer posted an earnings and revenue beat for the first quarter and raised its guidance for the full year.

Not only does 60% of its sales come from groceries, but Walmart also benefited from consumers trading down from brands to less expensive options, she said in an interview with "Squawk on the Street."

"You look at the value that they're offering, you look at the convenience of the locations, what they've done with digital, it all wrapped up very nicely," Telsey said.

This earnings season has also shown that consumers are returning to stores and spending money on food and experiences, like travel, she added.

— Michelle Fox

As generative artificial intelligence grows in popularity, Roundhill Investments is launching an exchange-traded fund for investors looking to play the trend.

The actively-managed ETF, known as the Roundhill Generative AI & Technology ETF (CHAT), holds a slew of names that have benefited from recent AI tailwinds. Top holdings include popular chipmaker Nvidia, Advanced Micro Devices, Alphabet, Microsoft and C3.ai.

— Samantha Subin

Deutsche Bank reiterated a buy rating on Charles Schwab stock on Thursday, noting the company can hold up against a more challenging macroeconomic backdrop.

"We are encouraged by the recent improvement in the pace of balance sheet deposit decline at SCHW, with client cash sorting continuing to moderate. The pace of core balance sheet deposit decline in April was better than our forecast," Deutsche Bank analyst Brian Bedell said.

Liquidity concerns in the broader banking sector has put pressure on Schwab stock which has lost about 38.5% from the start of 2023.

CNBC Pro subscribers can read the full story here.

— Brian Evans

There are 51 stocks in the Nasdaq-100, or roughly half, that were still off their 52-week highs by 20% or more on Thursday. Electric vehicle makers Rivian and Lucid are sitting roughly 67% and 66%, respectively, from their highs. Tesla is off by 44.5%. Amazon has about 20% to go.

Other names that follow include: Enphase, JD.com, Zoom Video, Moderna, PayPal, Zscaler, Crowdstrike, Datadog, Gilead and Costco.

However, 34 names, or about 33% of the index, are within less than 5% of their 52-week highs, including Intuitive Surgical, Nvidia, Netflix, Lululemon and PepsiCo.

Mega-cap tech leads this group. Microsoft and Alphabet are sitting less than 1% from their highs, while Apple and Meta are about 1% off.

— Gina Francolla, Tanaya Macheel

Data analytics software vendor Palantir jumped over 11% on Thursday, pushing its month-to-date gains to more than 45%.

Thursday's rally came after disclosure that Ark Invest's Cathie Wood piled into the stock. The popular investor bought 912,193 shares for her flagship Ark Innovation ETF on Wednesday. She also purchased about 350,000 for her two other funds.

Palantir's stock got a boost earlier this month after strong-than-expected quarterly earnings.

— Yun Li

These are some of the stocks making the biggest moves midday:

• Walmart — Shares of the big box retailer rose slightly after the company reported an earnings and revenue beat for the fiscal first quarter. Walmart also raised its guidance for the full year. However, its adjusted earnings guidance for the fiscal second quarter came in lower than expectations.
• Bath & Body Works — The retailer's shares jumped more than 9% after its fiscal first quarter earnings topped expectations. The company also raised its guidance for the full year. Bath & Body Works reported adjusted earnings of 33 cents per share, while analysts surveyed by Refinitiv had estimated 26 cents earnings per share. The company's $1.4 billion in revenue came in-line with estimates. 
• FedEx — Shares of the shipping giant climbed 1.7% in midday trading. Deutsche Bank raised its price target on FedEx stock a day earlier and reiterated a buy rating, citing the potential for the company's June 20 quarterly results to help lift shares on strong forward guidance.

The full list can be found here.

— Hakyung Kim

Information technology and communication services stocks pulled the S&P 500 into positive territory for the session.

The were the two best performing of the broad index's 11 sectors, with information technology gaining 1.6% and consumer discretionary adding 1.2%. By comparison, the index as a whole is up 0.3%.

Synopsys and Cadence Design Systems led the ascent in information technology, jumping more than 7% and 5%, respectively. Chip-related stocks Micron, Nvidia and Applied Materials were also among the sector's best performers.

Take-Two and Netflix were the top performers in the consumer discretionary sector with gains of more than 12% and 9%, respectively. Netflix's move follows its presentation to advertisers, while Take-Two's came on the back of its earnings report.

Consumer discretionary was the only other sector trading up in Thursday's session, posting a 0.8% advance. Utilities was the worst performing sector on Thursday with a 1% loss, with just one (WEC Energy) of the 30 stocks in the sector above the flatline.

The information technology, consumer services and consumer discretionary sectors are also the top three, in that order, when looking at week-to-date change.

— Alex Harring

Truist downgraded Procter & Gamble to hold from buy on Thursday and lowered its price target to $155 from $165 per share.

"We believe the company has done a remarkable job of refocusing its product portfolio, cutting ~$10B of overhead and other costs and improving investor sentiment over the past five years. However, we now believe the current valuation of the stock fully reflects those turnaround efforts," analyst Bill Chappell wrote in a note to clients.

"We just believe that [the] stock will be stock in a holding pattern, with increased downside risk, for the next few quarters," he added.

Shares of Procter & Gamble slid 1.8% on Thursday and are up fractionally for the year.

— Michelle Fox

Netflix's stock popped about 8% on Thursday following the streaming giant's upfront presentation to advertisers.

During the event held Wednesday, the media company revealed that its new ad-supported tier boasts nearly 5 million active monthly users.

Wall Street seemed to broadly view upfront in a positive light, with JPMorgan reiterating its overweight rating, and saying it's becoming "incrementally positive' on shares.

— Samantha Subin

The major indexes took a leg higher after House Speaker Kevin McCarthy said Thursday he's optimisitc congressional negotiators could reach a deal on the debt ceiling in time for a House vote next week.

"I see the path that we can come to an agreement," McCarthy told reporters in the Capitol. "And I think we have a structure now and everybody's working hard, and I mean, we're working two or three times a day, then going back getting more numbers."

— Christina Wilkie

The Nasdaq Composite held onto a 0.5% gain during early morning trading Thursday.

The tech-heavy index got a boost from information technology and communication services stocks, with shares of Amazon and Netflix last up 2% and 8%, respectively. Big technology stocks Microsoft, Apple, Alphabet also moved higher.

Chip stocks offered another leg of support to the Nasdaq, with Nvidia up more than 2%. Micron Technology popped nearly 5% on news that it's helping build chips in Japan. Marvell Technology, Applied Materials and Lam Research both added 2%.

Synopsys and Take-Two Interactive surged 7% and more than 10%, respectively, on the heels of their earnings reports. Software stocks CrowdStrike, Datadog and Workday also gained.

— Samantha Subin

The Dow was the worst performer of the three major indexes in morning trading with a loss of around 0.2%.

Procter & Gamble, Chevron, Walgreens and UnitedHealth all weighed on the blue-chip average as each dropped more than 1%.

Walmart and Intel helped buoy the 30-stock index with each gaining more than 2%. Shares of Walmart rose after the retail giant beat Wall Street expectations for the first quarter and gave upbeat guidance.

— Alex Harring

The Conference Board's Leading Economic Index declined 0.6% in April, signaling more deterioration in the U.S. economic picture.

Though the index, fell in line with the Dow Jones estimate, it still was indicative of a slowing growth picture and a potential recession ahead.

"Importantly, the LEI continues to warn of an economic downturn this year," said Justyna Zabinska-La Monica, the board's senior manager of business cycle indicators. "The Conference Board forecasts a contraction of economic activity starting in Q2 leading to a mild recession by mid-2023."

The LEI looks at 10 components including jobless claims, manufacturing gauges and financial market benchmarks such as bond yields and the S&P 500.

—Jeff Cox

UBS raised its price target on FedEx on Wednesday, as the firm said it expects quarterly results next month to surpass consensus expectations. Shares were up more than 2% in Thursday's session.

"We believe upcoming results from FedEx next month can be a meaningful positive catalyst for shares. We see little to no risk on the quarter itself, and we are very positive on the potential for 2024 earnings and guidance relative to consensus," Deutsche Bank analyst Amrit Mehrotra said.

FedEx will report quarterly results on June 20. CNBC Pro subscribers can read the full UBS call here.

— Brian Evans

The Dow and S&P 500 both opened in the red Thursday.

The Dow was down 0.2%, while the S&P 500 was slightly below flat. The Nasdaq Composite, on the other hand, was up 0.2%.

— Alex Harring

Dallas Federal Reserve President Lorie Logan said Thursday that the economic data points so far don't justify skipping a rate increase at the central bank's next meeting in June.

"After raising the target range for the federal funds rate at each of the last 10 FOMC meetings, we have made some progress," she said in prepared remarks for a speech to bankers in San Antonio. "The data in coming weeks could yet show that it is appropriate to skip a meeting. As of today, though, we aren't there yet."

Futures took a leg lower following her remarks.

— Jeff Cox

Initial jobless claims unexpectedly declined last week, indicating the labor market still has some tightness.

First-time filings for the week ended May 13 totaled 242,000, a drop of 22,000 from the previous week and below the Dow Jones estimate for 250,000, the Labor Department reported. Continuing claims nudged lower to 1.799 million, against the FactSet estimate for 1.829 million.

In other economic news, the Philadelphia Federal Reserve's manufacturing index for the region rose to -10.4, an increase of 29 percentage points and better than the estimate for -20.

However, the index, which measures the percentage of companies reporting expansion against those seeing contraction, still showed the sector in decline for the region.

—Jeff Cox

These are some of the stocks making the biggest moves before the bell:

Walmart – Shares of the retail giant rose more than 1.5% in premarket trading after the company raised its full-year forecast and reported an almost 8% gain in sales for the fiscal first quarter, pointing to strength in its large grocery business that helped offset weaker sales in clothing and electronics.

Take-Two Interactive Software — The video game company surged 14% after posting better-than-expected revenue for its fiscal fourth quarter. Take-Two Interactive shared a weaker-than-expected outlook, but signaled that a strong future gaming slate could fuel strong growth thereafter.

Boot Barn — The western footwear brand shed more than 13% before the bell. Boot Barn reported fiscal third-quarter revenue and guidance that fell short of Wall Street's expectations.

Read the full list of stocks moving here.

— Samantha Subin

Shares of Bath & Body Works jumped nearly 10% in premarket trading after the retailer of body care and fragrance posted stronger-than-expected earnings and revenue for the latest quarter. Bath & Body Works also raised its full-year earnings guidance.

Dan Loeb's Third Point has been an activist investor in the company, raising red flags on the company's executive compensation structure, financial discipline and board composition.

— Yun Li

The three major U.S. stock indexes are on track for winning weeks with 60% of the trading week in the rearview mirror.

The Nasdaq Composite has led the way, up 1.8% so far this week. The S&P 500 and Dow have added 0.8% and 0.4%, respectively, on the week.

All three were helped by a Wednesday rally, with each index finishing more than 1% higher.

— Alex Harring

Shares of Walmart rose more than 1.5% in premarket trading after the retail giant on Thursday raised its full-year forecast and reported an almost 8% gain in sales for the fiscal first quarter, pointing to strength in its large grocery business that helped offset weaker sales in clothing and electronics.

Walmart also reported stronger-than-expected adjusted earnings and revenue, according to Refinitiv.

— Tanaya Macheel, Melissa Repko

Gold prices dipped slightly Thursday, as investors grew optimistic that U.S. lawmakers could reach a deal to raise the debt ceiling. However, UBS Global Wealth Management is still bullish on the precious metal, citing three reasons:

1. "Central bank demand should remain robust:" Mark Haefele, CIO at UBS Global Wealth Management, said 2022 was the 13th straight year that central banks were net buyers of gold, and demand is unlikely to let up anytime soon. "Based on the 1Q23 data from the World Gold Council, central banks are on track to buy around 700 metric tons of gold this year, much higher than the average since 2010 of below 500 metric tons," he wrote.
2. Dollar weakness: The dollar index, which tracks the U.S. currency's performance against six others, is down 0.4% year to date, which should be supportive for gold prices. "The direction of a weakening dollar is clear, with the US Fed having signaled a pause in its current tightening cycle after 500 basis points of rate hikes over the past 14 months," Haefele wrote.
3. Recession risk: "Overall, recent data coming out of the US showed the country's growth is slowing, with weaker-than-expected 1Q GDP, six consecutive months of contracting manufacturing activity, and the weakest consumer sentiment since November," according to UBS.

— Michael Bloom, Fred Imbert

European markets opened higher Thursday as U.S. debt ceiling talks make progress.

The pan-European Stoxx 600 index was up 0.3%, with most sectors trading in positive territory. Auto stocks led modest gains with a 0.9% uptick, followed by tech, which was up 0.7% at the start of trading.

— Hannah Ward-Glenton

Japanese conglomerate Sony Group is mulling a partial spin off of its financial business in the next two to three years.

Sony said that this will be on the consideration that the group will continue to own a portion - slightly less than 20%, Sony says of the spin off.

This is "so that the financial services business can continue to utilize the Sony brand, and continue to generate synergies with Sony Group companies after the execution of the spin-off."

The financial unit reported a revenue of 1.45 trillion yen ($10.74 billion) in the financial year ended March, while operating profit came in at 223.9 billion yen for the full year.

Shares of Sony closed 6.4% higher on Thursday.

— Lim Hui Jie

Japanese markets extended their winning streak on Thursday, with the Nikkei 225 leading gains in the region and continuing to trade above the 30,000 mark.

The Topix maintained levels not seen since August 1990.

Energy and technology stocks led the Topix, with its top gainers being Sony and electronics company Tokyo Electron.

Meanwhile, Factset revealed that electronics stocks powered the Nikkei, with the top gainer on the index being semiconductor test equipment manufacturer Advantest, followed by Tokyo Electron.

— Lim Hui Jie

Shares of Chinese tech giant Tencent in Hong Kong have slid over 3% even as the company reported an 11% jump in quarterly revenue to 150 billion Chinese yuan ($21.4 billion)

This marked its fastest growth in more than a year, as the company saw a big rebound in payment volumes, ad sales, and gaming.

Net profit climbed 10% to 25.8 billion yuan, lower than than the 31 billion yuan expected by economists polled by Reuters.

— Lim Hui Jie, Ryan Browne

Nomura downgraded its China full-year growth forecast from 5.9% to 5.5%, according to a Wednesday note.

"China's post-Covid recovery has been rapidly losing steam," Nomura's Ting Lu wrote, noting that the latest activity data and high frequency data in May show the momentum has been losing steam "due partly to weak confidence among consumers and business investors."

"As disappointment kicks in, we see a rising risk of slower activity growth, rising unemployment, persistent disinflation, falling market interest rates, and a weaker currency," he wrote.

Nomura added that it is also cutting its 2024 full-year gross domestic product forecast for China from 4.4% to 4.2%. It now expects the second quarter's GDP to grow 7.8%, third quarter to grow 4.9%, and the final quarter of the year to grow 5.0%.

– Jihye Lee

Japan's trade deficit has narrowed by almost half in April, falling to 432.41 billion from 854.93 billion a year ago.

Most notably, imports fell by 2.3% year on year, more than the 0.3% expected by economists polled by Reuters.

Exports came in largely in line with expectations, rising 2.6% year-on-year compared to the 3% expected.

— Lim Hui Jie

The three major averages weren't the only indexes that had a strong session during Wednesday's trading. The Russell 2000 – the small cap benchmark — surged 2.21% to close above its 50-day moving average of 1,765.83, a first since March 8.

The smaller firms that make up the 2,000-stock index are especially sensitive to the economic cycle. The 50-day moving average, meanwhile, is important for chart technicians: A close above that threshold can indicate that a positive trend for the index is unfolding.

Stocks leading the Russell 2000 higher Wednesday include National Western Life, Qurate Retail and Microvast.

-Darla Mercado, Gina Francolla

Check out the companies making headlines in extended trading.

Take-Two Interactive Software — Shares jumped 8.1% Wednesday during after hours trading. The video game company reported $1.39 billion in adjusted revenue in the fiscal fourth quarter, topping analysts' estimates of $1.34 billion, according to Refinitiv. Meanwhile, the company's estimates for bookings in the first-quarter and full-year missed Wall Street's expectations.

Cisco Systems — Shares dipped nearly 4% despite the company reporting an earnings and revenue beat for the fiscal third quarter. Cisco posted adjusted earnings of $1 per share and $14.57 billion in revenue. Analysts had estimated 97 cents earnings per share and $14.39 billion in revenue, according to Refinitiv.

The full list can be found here.

— Hakyung Kim

U.S. stock futures opened flat Thursday night.

Dow Jones Industrial Average futures dipped 13 points, or 0.04%. S&P 500 and Nasdaq 100 futures ticked down 0.03% and 0.02%, respectively.  

— Hakyung Kim