Dow surges more than 300 points as Biden, McCarthy look close to reaching a deal to raise US debt limit

President Joe Biden and Speaker of the House Kevin McCarthy

House Speaker Kevin McCarthy and President Joe Biden met in the Oval Office on May 9.Anna Moneymaker / Getty Images

  • US stocks jumped on Friday on news that the White House and Republican leaders were about to reach an agreement to raise the debt ceiling.

  • A potential deal could lift the debt limit by $31 trillion over two years.

  • The Fed’s preferred inflation gauge shows upside pressure in April.

U.S. stocks jumped on Friday as it was reported that negotiators representing President Joe Biden and Republican leader Kevin McCarthy were close to reaching an agreement to raise the national debt ceiling, a key step toward avoiding a collapse. US debt.

Technology shares rallied, leading the Nasdaq Composite to a strong rise and the Dow Jones Industrial Average scoring its first win after falling in the past five sessions.

Multiple reports on Friday said Biden and House Speaker McCarthy were close to a deal to lift the $31 trillion debt ceiling over two years. Lawmakers are racing against a June 1 deadline that the Treasury Department said could be the date when they will run out of cash to pay the country’s bills.

An emerging deal could essentially freeze government spending on domestic programs and slightly increase funding for military and veterans affairs, The Washington Post reported. Republicans are pushing for spending cuts while Democrats want to keep funding for education and environmental protection.

Here’s where the US indexes stand at 4:00 p.m. on Friday’s closing bell:

Carol Schleif, chief investment officer at BMO Family Office, said in a Friday note.

“We expect the stock market to continue to lead over the next few weeks until the debt ceiling uncertainty passes,” she wrote.

Stocks holdings will rise after the Federal Reserve’s preferred inflation gauge, the core PCE index, rose to 4.7% year-over-year in April, beating expectations of 4. 6%.

Peter Essele, Commonwealth Financial Network’s head of portfolio management, wrote in a note.

Here’s what else is happening today:

In commodities, bonds and cryptocurrencies:

Read the original post on Business Insider


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