US stocks jump as debt ceiling looks to pass through Senate by week's end

US stocks jump as debt ceiling looks to pass through Senate by week’s end

US stocks reached a nine-month high on Thursday as lawmakers in Washington boosted traders’ hopes that the debt ceiling will pass through the Senate by the end of the week, and fresh economic data curbed concerns about a recession.

The Fiscal Responsibility Act passed by a vote of 314-117 with bipartisan support on Wednesday night. Senate Majority Leader Chuck Schumer, D-N.Y., said the Senate will stay in session until a bill is sent to President Biden’s desk.

Beyond the debt ceiling battle, investors are looking ahead to the Federal Reserve’s June 13-14 policy meeting as another possible market catalyst.

The Dow Jones Industrial Average traded up 153.3 points, or 0.47 per cent, to end at 33,061.57 despite a 4.7 per cent tumble in Salesforce shares a day after its earnings report. The S&P 500 gained 0.99 per cent to finish at 4,221.02, while the Nasdaq Composite added 1.28 per cent to end at 13,100.98. Both the S&P 500 and Nasdaq closed at their highest levels since August 2022.

Data from ADP showed private payrolls grew more than economists expected in May, while the number of jobless claims filed last week was smaller than economists forecasted. The labor market has been a closely watched area of the economy given concerns that sustained strength could prompt the Fed to once again raise interest rates at its policy meeting later this month.

The Nasdaq is up nearly 1 per cent week to date, putting the technology-heavy index on pace for six straight weekly wins — a streak length not seen since January 2020. The S&P 500 is on track to end around 0.4 per cent higher, while the Dow is poised to lose 0.1 per cent on the week.

In commodity news, limited supply of critical metals could delay the EU's energy transition as per a study by Sweden's Chalmers University. Global production levels of raw materials do not meet the demand of the EU's EV industry, and scaling up production takes time. The EU heavily relies on imports of these metals from a few countries, posing a risk to the adoption of electric cars and sustainable technologies.

Overall, all US sectors closed higher except for Utilities and Consumer Staples. Tech was the best performer.

Futures

The SPI futures are pointing to a 0.7 per cent gain

Currency

One Australian dollar at 7:10 AM is buying 65.70 US cents.

Commodities

Iron ore futures are pointing to a 1.65 per cent gain.

Gold added 0.67 per cent. Silver gained 1.64 per cent. Copper jumped 2.09 per cent and oil gained 3.08 per cent.

Figures around the globe

Across the Atlantic, European markets closed higher. London’s FTSE added 0.59 per cent, Frankfurt gained 1.21 per cent while Paris closed 0.55 per cent higher.

In Asian markets, Tokyo’s Nikkei added 0.84 per cent, Hong Kong’s Hang Seng fell 0.10 per cent while China’s Shanghai Composite closed flat.

Yesterday, the Australian sharemarket closed 0.27 per cent higher at 7111.

Dividends payable

Evolution Mining (ASX:EVN)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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