Wall Street stocks rose on Thursday after policymakers in Washington said that a bill to raise the US debt ceiling may be put to a vote next week, raising the possibility of a deal to avoid the government defaulting on its debt.
Wall Street’s benchmark S&P 500 was up 0.3 per cent while the tech-heavy Nasdaq Composite added 0.8 per cent, though both indices had come off highs hit earlier in the day.
The remarks on the possible vote next week came from Republican House Speaker Kevin McCarthy, who told reporters on Capitol Hill, “We’re not there, we haven’t agreed to anything yet. But I see the path that we can come to an agreement.
“I think we have a structure now and everybody’s working hard. I mean we’re working two or three times a day, then going back getting more numbers.”
“All of this should be taken with a grain of salt,” said Joel Kruger, market strategist at LMAX Group. “With [Treasury] yields on the rise and the US dollar driving higher, we would be concerned about the sustainability of the equity market rally.”
The yield on interest rate-sensitive two-year Treasury notes was up 0.1 percentage point to 4.26 per cent. The yield on the benchmark 10-year note added 0.06 percentage points at 3.64 per cent. Bond yields rise when prices fall.
The dollar index, which tracks the currency against a basket of six peers, gained 0.7 per cent.
Meanwhile, data from the US labour department showed applications for new unemployment aid fell to 242,000 claims last week, from 264,000 in the previous seven days.
The figure landed below analysts’ expectations, raising concerns that a tight labour market could make it harder for the Federal Reserve to bring inflation levels back to target.
Corporate results have added to investors’ confusion around consumer spending. Walmart shares were up 0.8 per cent after the world’s largest retailer delivered stronger than expected earnings and raised its full-year forecasts for sales growth.
The company was the outlier among rivals Home Depot and Target, which painted a much bleaker image of US discretionary spending earlier in the week.
In Europe, the region-wide Stoxx 600 rose 0.4 per cent, recovering from two consecutive down days. France’s CAC 40 was up 0.6 per cent, while Germany’s Dax rose 1.3 per cent.
Asian stocks were also higher, propelled by the momentum from Wall Street. Hong Kong’s Hang Seng index added 0.9 per cent and Japan’s Topix rose 1.1 per cent.
China’s CSI 300 was the outlier, falling 0.1 per cent, and extended its losses from earlier in the week when official data pointed to a slowdown in the country’s post-pandemic recovery.