US stocks ended higher on Friday as talks to raise the US debt level continued, while stocks rose for a second day in a row on false intelligence optimism.
After several rounds of talks, US President Joe Biden and congressional leader Kevin McCarthy appeared close to an agreement to raise the debt limit to $31.4 trillion over two years while cutting spending, a US official told Reuters.
The Dow Jones Industrial Average ended a five-day losing streak, while the Nasdaq Composite Index closed at its highest level since August 2022.
The Philadelphia Semiconductor Index rose for the second day in a row. Building on recent AI-related excitement, Marvell Technology Inc jumped after the chipmaker said it would double its annual AI-related revenue.
Investors closely followed the debt ceiling talks as Biden and McCarthy still appeared to be at odds on several issues heading into the long weekend.
“All signs are that an agreement is coming and this meeting is not over, but if we finish the weekend and there is no agreement or it falls apart, we will wake up Tuesday morning with a big loss,” said Scott Ladner. , chief investment officer at Horizon Investments in Charlotte, North Carolina.
Shares of Nvidia Corp. rose, adding to Thursday’s 24% gain after strong forecasts and increasing its market capitalization to about $960 billion, according to Refinitiv.
Informally, the S&P 500 was up 1.31% to end the session at 4,205.46.
The Nasdaq gained 2.19% to 12,975.69, while the Dow Jones Industrial Average rose 1.00% to 33,093.27.
Data showed that US consumer spending rose more than expected in April and inflation picked up, which could prompt the Federal Reserve to raise rates again next month.
“We still have inflation, we still have high interest rates and that will continue to be a problem for the market until the Federal Reserve comes out,” said David Sadkin, chairman of Bel Air Investment Advisors.
Traders now see a 60% chance of a 25-point hike from the Fed at its June policy meeting, up from around 40% before the data, according to the CME FedWatch tool.
Ford Motor Co jumped after the company signed a deal to give customers access to more than 12,000 Tesla Inc chargers in North America by early 2024. Tesla jumped 6.7%.
Ulta Beauty Inc fell after the cosmetics retailer cut its full-year operating margin forecast.
Paramount Global rose after the majority shareholder of the media conglomerate, National Amusements, received a $125 million investment.