As traders gained confidence that Congress would strike an agreement to raise the U.S. debt ceiling, preventing a potentially disastrous default, stocks rose on Friday.
At 33,093.34, the Dow Jones Industrial Average increased by 328.69 points, or 1%. Closed at 4,205.45, the S&P 500 increased 1.3%, and the Nasdaq Composite increased 2.2% to 12,975.69.
To drive the Dow higher, Intel and American Express each increased by 5.8% and 4.1%. The S&P 500’s consumer discretionary and technology sectors both increased by more than 2%.
With a 2.5% increase, the Nasdaq recorded its fifth consecutive weekly gain. The S&P 500 also reported a one-week gain of 0.3%. The Dow lost 1% this week, making it the underperformer.
Negotiators from the Congressional delegation and the Biden administration were closing near on a compromise that would raise the country’s borrowing capacity for two years. The progress made in the talks on Thursday night, according to House Speaker Kevin McCarthy, but he added: “We’ve got to make more progress now.”
According to Treasury Secretary Janet Yellen, if the debt ceiling is not lifted, the United States might experience a default as early as June 1. A U.S. debt default may have disastrous repercussions, according to economists and Wall Street leaders.
Ed Moya, senior market analyst at Olanda, said on Friday that once a debt agreement is reached, markets will have to face the harsh fact that the Fed will kill this economy. It’s possible that tightening won’t stop until the end of the summer, which indicates that rate reductions will likely be larger the next year.
Source (CNBC)
