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US stocks rise as debt ceiling concerns ease

Wall Street shares rose Wednesday as investors increased confidence that the White House would reach a deal with Congress to avoid a government default.

of Wall Street Wednesday’s benchmark S&P 500 closed 1.2% higher on gains in financial and energy sectors, while the tech-rich Nasdaq Composite rose 1.3%.

KBW region banking The index rose 7.3%, with lender Western Alliance jumping 10.2% after reporting deposit growth for the quarter late Tuesday.

US President Joe Biden said Wednesday: he was “confident” He mentioned reaching a budget deal with Congress to avoid a U.S. debt default, leaving open the possibility of meeting a central Republican request to add labor requirements to the social safety net program.

In response to Treasury Secretary Janet Yellen’s warning that the U.S. could default on its debt as early as next month, Biden said: rounded up his upcoming trip abroad.

“Looking at the broader picture, equities are not priced for a catastrophic scenario. Ultimately the market is hoping for a solution,” said HSBC Global Private Banking’s Europe & Middle East.惻Georgios Leontalis, Chief Investment Officer for Africa said.

Government bonds have performed well since the last meeting, with interest-sensitive two-year Treasury yields rising 0.08 percentage points to 4.15%. The benchmark 10-year yield rose 0.03 percentage points to 3.58%. Yields on bonds rise when prices fall.

Earlier this week, yields on short-term bills that mature next month, which could drain the government’s money, reached their highest level since before the 2008 financial crisis. The one-month Treasury yield on Wednesday fell 0.16 percentage points to 5.38%.

One-year credit default swaps, a key gauge of U.S. default risk, fell 10.6% to 154 basis points after reaching its highest level since 2009 at the end of last month.

The dollar index, which pegs the currency against a basket of six countries in the country, rose 0.3% to its highest level since late March as investors want to hold onto assets.

“Certain parts of the market are pricing in more risk than others,” Leontalis said.

Elsewhere, the target stock rose 2.6% after the company said earnings in the first three months of the fiscal year beat expectations.

But the Minneapolis-based retailer warned of a weak second quarter and set a lower-than-expected outlook on Wall Street. The short-term outlook comes after home improvement retailer Home Depot warned Tuesday that its profits will fall short of expectations this year and the Census Bureau reported that U.S. retail sales growth fell short of expectations in April. It reflects other trends in

US housing starts rose 2.2% to 1.4 million a year, according to data released Wednesday.

“Mortgage rates remain high, but home builders have been successful with lower rates, price discounts and other incentives,” analysts at Wells Fargo said.

European stocks languished, with the region-wide Stoxx600 index down 0.2%, the FTSE 100 index down 0.4% and the French CAC40 index down 0.1%.

Traders received the release of the Eurozone’s April CPI Final Harmonization Index, which pushed the annualized rate up slightly to 7% from 6.9% in March.

Core inflation, which excludes food and energy costs, fell 0.1 percentage points to 5.6%.

The European Central Bank has slowed its pace of rate hikes this month, raising the deposit rate by a quarter percentage point to 3.25%, but said there was still room to cover.

In Asia, China’s CSI300 index fell 0.5%, while Hong Kong’s Hang Seng Index fell 2.1%.

Japan’s TOPIX was an outlier, up 0.3% after better-than-expected gross domestic product (GDP) numbers.

The international oil index Brent crude rose 2.7% to $76.96 a barrel, while its US equivalent West Texas Intermediate rose 2.8% to $72.83 a barrel.

https://www.ft.com/content/2aeb11f6-483d-46cc-ad37-cb8549c318f8 US stocks rise as debt ceiling concerns ease

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