US stocks closed higher on Thursday, driven by growing optimism that a deal to raise or suspend the debt ceiling could be reached within days. Walmart (NYSE: WMT )'s upbeat annual sales forecast also provided support. The S&P 500 index rebounded from early declines after top US congressional Republican Kevin McCarthy stated that a deal might potentially be reached in time for a House vote next week. Walmart's shares gained following the retail giant's better-than-expected first-quarter earnings report and an improved 2023 sales and profit outlook.
Investors welcomed signs that two major market risks could be diminishing. Policymakers in Washington have hinted that a bill to raise the US debt ceiling may be introduced next week, potentially preventing a catastrophic default by the federal government. Strong economic data such as a better-than-expected Philly Fed index and a decline in weekly jobless claims have also allayed recession fears. However, the robust data has led to an increase in forward US rate expectations, propelling the dollar upwards.
Oil markets are conflicted between strong US economic data and deflationary impulses from China, with supply issues rather than demand affecting the bullish thesis.
On Thursday, US stocks and the dollar rose as Walmart raised its sales outlook and robust economic data alleviated recession concerns while also dampening hopes for a Federal Reserve interest rate cut before year-end. Investors kept an eye on debt ceiling negotiations in Washington for indications that Democrats and Republicans might be approaching a deal.
Among the three major US stock indexes, tech shares propelled the Nasdaq to its most significant gain, while healthcare restricted the blue-chip Dow's advance. The greenback extended its climb against a basket of world currencies, reaching a seven-week high, fueled by the economic data and debt ceiling hopes.
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.