-
US stocks jumped on Friday after reports that the White House and the Republican leadership were close to reaching an agreement to raise the debt ceiling.
-
A potential deal could raise the $31 trillion debt limit for two years.
-
The Fed’s preferred measure of inflation showed price pressures rising in April.
US stocks jumped on Friday on reports that negotiators representing President Joe Biden and Republican leader Kevin McCarthy are close to reaching a deal to raise the country’s debt ceiling, a crucial step in avoiding a US debt default.
Tech stocks rallied, sending the Nasdaq Composite sharply higher, and the Dow Jones Industrial Average posted its first win after falling for the past five sessions.
Multiple news reports said Friday that Biden and House Speaker McCarthy are close to a deal to raise the $31 trillion debt ceiling for two years. Lawmakers are racing to a June 1 deadline that the Treasury Department has said could be when the cash will run out to pay the country’s bills.
The emerging deal would essentially freeze government spending on domestic programs and slightly increase funding for military and veterans affairs, The Washington Post reported. Republicans have been pushing for spending cuts while Democrats want to preserve funding for education and environmental protection.
Here’s where US indices stand at the 4:00 PM closing bell on Friday:
The stock market has remained stable even in the face of debt ceiling uncertainty, as investors are confident a deal will be struck, and any market volatility driven by the debt ceiling is likely to be short-lived, Carol Schleife, chief investment officer at BMO Family Office, said. In a note on Friday.
“We expect the stock market to remain driven by major events for the next few weeks until the debt ceiling uncertainty passes,” she wrote.
Stocks held on to gains after the Fed’s preferred measure of inflation, the core personal consumption expenditures index, rose to 4.7% year-on-year in April, above expectations of 4.6%.
“The rally in rates is re-enacting the June increase, perhaps even more than a quarter of a percent in a last-ditch effort by the Fed to put out the inflationary fire once and for all,” Peter Iseley, head of portfolio management for Commonwealth Financial Network, wrote in a note.
Here’s what else is happening today:
In commodities, bonds and cryptocurrencies:
Read the original article at Business interested