Home ›› 29 May 2023 ›› Stock
Wall Street's main indexes rose and European shares logged their largest one-day gain in two months on Friday as talks on raising the US debt ceiling progressed.
Treasury yields climbed as investors rethought how long interest rates were likely to keep rising.
Democratic and Republican negotiators were still struggling to reach a deal to raise the US government's debt ceiling with the deadline looming, reported Reuters.
The MSCI world equity index (.MIWD00000PUS), which tracks shares in 49 nations, gained 1.09% but was still down 0.51% on the week.
US data showed stronger-than-expected consumer spending in April. The increase in personal consumption expenditures (PCE) raised expectations the Federal Reserve will hike interest rates again in either June or July.
US President Joe Biden and top congressional Republican Kevin McCarthy appeared to be closing in on an agreement ahead of a June 1 deadline that would raise the government's $31.4 trillion debt ceiling for two years. A top Republican, however, said there were disagreements over some benefit programs for low-income Americans. Meanwhile, after the market close Treasury Secretary Janet Yellen extended the deadline for raising the debt limit to June 5.
The dollar eased against a basket of currencies, but was still on track for a third straight weekly gain as markets bet on higher-for-longer interest rates.
Gold advanced from two-month lows, and oil prices rose.
Euro zone government bond yields were higher as robust economic data and hawkish remarks by central bank officials triggered some upward repricing in market bets on euro zone interest rates.
"This week has been a bit of a wake-up call to rate expectations. There is a realization that inflation is going to be stickier for a lot longer," said Mike Hewson, chief markets strategist at CMC Markets.
The Dow Jones Industrial Average (.DJI) rose 1.00% to 33,093.34, the S&P 500 (.SPX) gained 1.30% to 4,205.45 and the Nasdaq Composite (.IXIC) climbed 2.19% to 12,975.69.
