Global Courant 2023-05-17 21:14:48
Traders work on the floor of the New York Stock Exchange during morning trading on May 17, 2023 in New York City.
Michael M. Santiago | Getty Images
Shares rose on Wednesday as investors hoped congressional leaders and President Joe Biden could come to an agreement on the US debt ceiling and avoid catastrophic bankruptcy.
The Dow Jones Industrial Average Traded 203 points higher, or about 0.6% S&P 500 gained about 0.5%, and the Nasdaq composite advanced 0.5%.
At the conclusion of a meeting between the president and congressional leaders Tuesday, House Speaker Kevin McCarthy said there is now a “better process” for further talks, saying it is “possible to strike a deal by the end of the week.” . The White House said Biden has canceled a second leg of an upcoming international trip to focus on negotiations.
“Now we have a structure to find a way to get to a conclusion,” McCarthy told CNBC’s “Squawk Box” on Wednesday. “I think at the end of the day we have no default. I think we finally got the president to agree to negotiate.”
Speaking at the White House on Wednesday morning, Biden said he and other lawmakers have had a “productive” meeting and will come to an agreement.
“I am confident that we will get an agreement on the budget America will not default,” said Biden.
Concerns about a possible default have weighed on the markets lately. The Dow is down more than 3% this month, including a 1% drop on Tuesday.
Sam Stovall, chief investment strategist at CFRA Research, said he expects markets to remain stuck in neutral even as news becomes “increasingly optimistic” about the debt ceiling. He cited recent trends in 10-year Treasury yields, as well as strength indicators in the S&P 500.
“They don’t really give a sense of which direction they’re likely to break, for better or for worse. We’re still in an upside channel for the S&P 500. But I think we’re looking for a catalyst to break out or break down,” said Stovall.
Finance Minister Janet Yellen has said the government should raise the limit immediately as the country could default as early as June 1.
Regional bank stocks rallied on Wednesday, helping market sentiment Bancorp of the Western Alliance detailed improving deposit growth. The SPDR S&P Regional Bank ETF was up 3.4%, while Western Alliance was up 12%.
