US stocks rose Friday following reports lawmakers are nearing a deal to raise the country’s debt ceiling. Negotiators looked set on working to finalize an agreement before a June 1 deadline. Inflationary pressures showed up in the core PCE index for April. Loading Something is loading.
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US stocks rose Friday as investors headed into the long holiday weekend with reports that Democrats and Republicans in Washington were moving closer to clinching a deal that would prevent the government from defaulting on its debt.
The S&P 500 and the Nasdaq Composite were on track to notch a second straight gain, and the Dow Jones Industrial Average was looking at its first advance after falling over the past five sessions.
Multiple reports said lawmakers were nearing an agreement that would raise the country’s $31 trillion debt ceiling for two years. That move is needed for the Treasury Department to continue to pay the country’s bills, with the cash balance on pace to run out as soon as June 1.
A deal could put caps on discretionary spending for two years while rolling back $10 billion of the $80 billion Congress approved in 2022 for the IRS to crack down on high earners and corporations that evade taxes, The New York Times reported. Republicans have been pushing for spending cuts while Democrats could use shifted IRS budget funds to avoid further cuts in programs such as education, the report said.
Here’s where US indexes stood at the 9:30 a.m. opening bell on Friday:
S&P 500: 4,163.17, up 0.29%Dow Jones Industrial Average: 32,863.27, up 0.30% (98.62 points)Nasdaq Composite: 12,740.25, up 0.33% Equities held to gains after the Federal Reserve’s preferred inflation gauge, the core PCE index, rose to 4.7% year over year in April, higher than expectations of 4.6%.
“The rise in prices puts a June hike back in play, perhaps even greater than a quarter percent hike in a last-ditch effort by the Fed to put out the inflationary fire once and for all,” Peter Essele, head of portfolio management for Commonwealth Financial Network, wrote in a note.
Nvidia shares may remain in focus after they surged 24% on Thursday on the chipmaker’s blockbuster first-quarter earnings and second-quarter guidance. Nvidia was nearing a $1 trillion market cap, bolstered by the company’s offerings in the expanding generative artificial intelligence market.
Here’s what else is happening today:
Cathie Wood’s ARK Invest sold most of its Nvidia stake just before the chipmaker’s stock kicked off a massive rally. JPMorgan appears to be working on a ChatGPT-style tool that will enable AI-powered investing.A US recession is already here and “nobody’s noticed,” said veteran economist David Rosenberg. A secretive US hedge fund has likely notched a $5 billion gain on Nvidia stock as the AI boom rages on.In commodities, bonds, and crypto:
West Texas Intermediate crude rose 1.2% to $72.51 per barrel. Brent crude, the international benchmark, rose 0.9% to $75.43. Gold picked up 0.4% to $1,951.30 per ounce. The 10-year Treasury yield rose 2 basis points to 3.74%.Bitcoin edged up 0.3% to $26,475.60.