NEW YORK: Wall Street stocks closed higher on Thursday (June 1) on hopes that the US central bank could pause its interest rate hikes, while traders eyed progress on a deal to avert the nation's first-ever default.
The Dow Jones Industrial Average rose 154.09 points, or 0.47%, to 33,062.36, the S&P 500 gained 41.26 points, or 0.99%, to 4,221.09 and the Nasdaq Composite added 165.70 points, or 1.28%, to 13,100.98.
Leading the S&P 500 higher was Nvidia Corp, though the chipmaker's surge on its forecast of greater AI-related revenue still fell short of helping the company enter the elite club of companies valued at US$1 trillion (RM4.6 trillion) or more.
The moves came after the House of Representatives late Wednesday approved a bill to suspend the nation’s debt limit – key to avoiding a default – and advanced it to the Senate.
Hammered out between US President Joe Biden and Republican leaders, the pact suspends the debt ceiling through 2024, and slightly cuts government spending next year.
On Thursday, investors also took in economic data suggesting the Federal Reserve (Fed) could have room to hold back on further interest rate increases in policymakers' upcoming meeting this month.
“I’m still on the cautious side, but I also recognise that there are a few catalysts that can continue to support the market for a period of time,“ said Jimmy Chang, chief investment officer at Rockefeller Global Family Office here.
“Most people will naturally gravitate towards the soft landing scenario,” he said. “My base case remains that we will get a recession in the coming quarters.”
A report by the Institute for Supply Management on the manufacturing sector indicated a fall in prices paid last month, providing a boost to a market that “wants to hear good news about inflation”, said Steve Sosnick of Interactive Brokers.
The market is also “pricing a much less chance” for interest rate increases at the next two Fed meetings following comments from central bank officials, he noted, bolstering it further.
While private hiring cooled less than expected in May according to data from payroll firm ADP, “if the market can make the case that we can add jobs and not have inflation, then that’s a good sign”, said Sosnick. – AFP, Reuters
Source: The Sun Daily
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