US Stock Indexes (Dow Jones, S&P 500, and Nasdaq Composite): Wall Street is cheering the U.S. debt ceiling deal along with the strong job data. Market participants now start to think that the U.S. is now out of danger, which could avert a default on the debt. Also, the moderation in the job data ensures that the Federal Reserve will unlikely hike the interest rate at the next policy meeting on June 13–14.
The U.S. Debt Ceiling Outcome
The U.S. Senate passed a bipartisan bill to lift the government’s $31.4 trillion debt ceiling, preventing a default. The bill, supported by President Joe Biden, was approved by a 63-36 vote. The Treasury Department had warned of being unable to pay all its bills on June 5 without action from Congress.
The legislation suspends the federal borrowing limit until January 1, 2025. While this battle is resolved, Senate Republican Leader Mitch McConnell flagged the next budget fight and Treasury Secretary Janet Yellen emphasized that the U.S. credit should never be used as a bargaining chip.
The bill includes spending cuts and additional funding for emergencies. The passage of the bill averted potential negative consequences such as global market shockwaves and interest rate increases.
The U.S. Jobs Data
Against expectations, US employers surprised everyone by adding 339K jobs in May despite sluggish wage growth.
In a surprising turn of events, US businesses added 339,000 jobs in May, surpassing expectations and giving a significant boost to the economy. Economists had predicted the addition of 190,000 jobs, making this a remarkable achievement.
However, it’s important to note that wage growth showed a slight slowdown. Average hourly earnings increased by 0.3% compared to the previous month’s 0.4% rise.
These numbers hold great importance as the Federal Reserve prepares for its upcoming meeting on June 13. The policymakers will carefully analyze this data to decide whether to continue gradually raising interest rates or consider a different approach due to concerns about rising inflation.
The softening labor market has played a crucial role in the Fed’s previous rate hikes. A decrease in labor demand could help ease wage pressures and contribute to curbing inflation.
The fate of interest rates remains uncertain as the latest employment figures present an unexpected twist in the decision-making process.
Dow Jones, S&P 500, and Nasdaq Composite
“The US stock market has seen a remarkable surge,” exclaimed market analysts. The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite have delivered impressive gains.
The monumental performance of these indexes on a weekly closing basis captivated investors. It truly showcases their strength and resilience, recognizing the remarkable display of the market’s power.
S&P 500
The S&P 500 made an impressive climb, with a strong surge of 61.35 points or 1.45%. It closed at 4,282.37, demonstrating the market’s unwavering confidence and resilience.
Dow Jones Industrial Average
The Dow Jones Industrial Average reached nearly 34000. Surging by a remarkable 701.19 points or 2.12%, the index closed at 33,762.76. This extraordinary performance showcased the strength and resilience of the American economy, generating optimism and excitement among investors.
Nasdaq Composite
The Nasdaq Composite experienced an impressive rally that caught the attention of global investors. It surged by a notable 139.78 points, or 1.07%, to reach 13,240.77.
The Nasdaq Composite’s remarkable performance for the last month reflects the adaptability and innovation that drive the tech sector. So, it makes it an appealing force for investors.
The Russell 2000
Not to be outdone, the Russell 2000 Index, a reflection of small-cap stocks and the heartbeat of US businesses, staged a mesmerizing breakout from its previous consolidation zone. Breaking free from the shackles of its range, the index surged to an astounding 1,830.91, marking a substantial gain of 62.97 points, or an impressive 3.56%.
What makes this breakout truly remarkable is the Russell 2000’s ability to surpass its 200-day moving average, a significant milestone that underscores the newfound strength and momentum in the small-cap segment.
US Dollar Index, Bond Yields, and Gold
After the job market reports, the U.S. dollar index stayed around 104. Treasury yields have been going up, leading bond traders to take profits because the debt ceiling was raised. However, this increase in yields doesn’t make the American currency much stronger.
As Treasury yields rise, gold prices have been affected and are getting closer to $1965. Even though the unemployment rate was higher than expected, gold markets didn’t get much support because traders thought the Federal Reserve might raise interest rates in July.
Crude Oil and Base Metals
U.S. crude futures ended the trading session with a 2.5% increase, reaching $71.87 per barrel. Simultaneously, the Brent contract experienced a 2.85% rise, settling at $76.40 per barrel.
Copper recorded a 0.54% gain, closing at 3.7310. On the other hand, aluminum futures registered a 0.64% decline, settling at 2268. Zinc futures, however, experienced a 1.59% increase, concluding at 2303. Overall, the base metals segment in futures trading exhibited a mixed performance.
Conclusion:
The US stock market ended the week with the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite exhibiting breathtaking moves that left investors spellbound.
Furthermore, the breakout of the Russell 2000 Index served as a stunning testament to the resilience and potential of small-cap stocks. So it adds another layer of excitement to this extraordinary market landscape.
All indices finally ended the week on a high note after a long time. Thus, excitement and interest in buying will also be high in the upcoming week.
Source: Investing.com
