Stocks were mixed Thursday as outsized gains from Nvidia (NVDA  ) overshadowed rising U.S. default concerns as debt-ceiling negotiations stretch on for another day.

Here's how the market settled on Thursday:

S&P 500 Index (SPY  ): +0.88% or +36.07 points to 4,151.31

Dow Jones Industrial Average (DIA  ): -0.11% or -35.20 points to 32,764.72

Nasdaq Composite Index (QQQ  ): +1.71% or +213.93 points to 12,698.09

Nvidia skyrocketed over 25% on Thursday as the chipmaker's second-quarter guidance shocked Wall Street after its first-quarter also beat estimates on top and bottom lines. Nvidia projected second-quarter revenue of $11 billion, driven by strong demand for its graphics processors which power AI applications, nearly doubling analyst expectations of $7.2 billion, according to Bloomberg data.

Thursday's strong performance is bringing the chipmaker's valuation near the $1 trillion mark, where which it would be the fifth publicly traded U.S. company to reach the milestone -- joining Apple (AAPL  ), Microsoft (MSFT  ), Alphabet (GOOG  ) and Amazon (AMZN  ).

"Back in late 2021, we began publishing work suggesting Nvidia would become the first semiconductor company with a trillion dollar market cap," Needham analyst Rajvindra Gill said in a note Thursday, quoted by CNBC. "While there was some peaks and valleys in the interim years, we believe Nvidia is in a position to achieve that valuation over time."

"Customers are 'racing' to meet large language models (LLMs) and generative AI based demand across all major modalities," Gill added. "We see nearly all past headwinds behind us, and expect the company is shipping to true, AI-related demand, near-term."

Nvidia's rally also fueled gains for other AI-related stocks, like AMD (AMD  ) and Taiwan Semiconductor (TSM  ), while the VanEck Semiconductor ETF (SMH  ) also rose higher.

Still, market attention was held by growing tensions surrounding a pending U.S. debt-limit deal in Washington D.C. Late Wednesday, Fitch Ratings warned that the United States' AAA rating -- the credit ratings agency's highest rank-- is under threat of a downgrade should lawmakers fail to raise the debt-ceiling before the U.S. Treasury runs out of money. The nation is now classified under "rating watch negative" by the agency.

Fitch's warning "underscores the need for swift bipartisan action by Congress to raise or suspend the debt limit and avoid a manufactured crisis for our economy," said Treasury spokesperson Lily Adams to Bloomberg.

On the economic front, a secondary reading for first-quarter GDP showed the U.S. economy rose at a 1.3% annualized rate, according to the Commerce Department, 0.2 percentage point avre the initial estimate. Meanwhile, initial jobless claimed totaled 229,000 for the week ended May 20, below estimates for 245,000 but an increase of 4,000 from the previous week's print.

In single-stock news, Snowflake (SNOW  ) shares fell over 15% after the cloud-computing company issued weak full-year outlook following its first-quarter earnings beat. The company lowered its fiscal 2024 guidance for product revenue growth to 34% or $2.6 billion from its earlier forecast for 44% to 45% growth.

Looking ahead, traders will react to fresh economic data includes April's personal consumption expenditures and May's final consumer sentiment reading. Wall Street will also continue to watch developments out of Washington over the debt-ceiling talks.

This is the final update for this article.