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Stock market today: Dow rallies 400 points on debt ceiling deal optimism

AuthorLiz Moyer
Published 05/17/2023, 04:15 PM
© Reuters.

Investing.com -- U.S. stocks surged on Wednesday amid optimism on the debt ceiling negotiations as retailers continue to report first-quarter earnings.

At 16:01 ET, the Dow Jones Industrial Average closed up 409 points or 1.2%, while the S&P 500 was up 1.2% and the NASDAQ Composite was up 1.3%.

The debt ceiling talks in Washington continue after top-ranking lawmakers met with President Joe Biden at the White House on Tuesday. The sides are trying to hammer out differences as the deadline for when the U.S. risks a default quickly approaches. After yesterday’s meeting, lawmakers expressed optimism a default would be averted.

Biden travels to Japan today for the weekend meeting of G-7 world leaders, but he is cutting the rest of a trip to Asia short while the debt ceiling issue persists. In remarks this morning, he said: “We’re going to come together, because there’s no alternative to do the right thing for the country.”

Target Corporation (NYSE:TGT) kicked off earnings from major retailers, reporting numbers that beat first-quarter forecasts but offering a second-quarter profit outlook that disappointed. Consumers are putting off some discretionary purchases while inflation forces them to spend more money on household necessities. Target shares closed up 2.6%.

TJX Companies Inc (NYSE:TJX), the parent of T.J. Maxx, fell short of revenue estimates for first-quarter earnings. Shares closed up 0.9%

Western Alliance Bancorporation (NYSE:WAL) shares rose 10% and led other regional banks higher after it gave another update on deposits, which continued to rise in May after the banking industry turmoil rocked the sector in March and April. Shares were up, while shares of other regional banks such as PacWest Bancorp (NASDAQ:PACW) and Zions Bancorporation (NASDAQ:ZION) rose 21.7% and 12%, respectively.

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Tesla Inc (NASDAQ:TSLA) shares rose 4.4% after yesterday’s annual shareholder meeting, where CEO Elon Musk said he intends to remain in that role at the electric vehicle maker. The company will start deliveries of its highly anticipated Cybertruck later this year.

In economic data, April housing starts of 1.4 million annualized were about even with expectations but numbers for March were revised lower. Initial jobless claims for the previous week are due out Thursday morning.

Earnings expected on Thursday include reports from Walmart (NYSE:WMT), Alibaba (NYSE:BABA) and Bath & Body Works.

Latest comments

Just announce US will continue printing and borrowing.....inflation and recession will be gone by tomorrow
mkr probably wouldnt even react to the routine itself
annual routine show on debt limit blah blah. It's really stupid to think that mkr did react to this stupid routine.
The argument that the markets should push this high because US defaulting is unlikely is ludicrous. The US has risen the debt ceiling scores of times and never defaulted. Everyone knows its all political theater. Just an excuse for more for manipulation.
"never defaulted" is false.
world run on USD. Will never default.
  "defaulted" is past tense
This is very interesting
tax churches - they in our healthcare. tax political contributions. tax stock buybacks. how about flat tax - we all do 10%.
futures show lower lows and lower highs pattern, suggesting mkt will go down tomorrow. today mkt misjudged if the house speaker were Democrat, ignoring he is probably the toughest man.
More debt should solve the problem...stocks up. Peak lunacy. This will create even more inflation and more rate hikes (these are bad for stocks...remember?)
Let's make a Federal Spending tax of 5% mandattory which can be income tax deductible. In one year personal Spending is $ 14 trillion. $ 700 billions, to cover the interests on the $ 31.7 trillions. Those 80000 new IRS agents have to earn their living. PS, OldandWise, not for nothing. 🇺🇸
what went up tends to come down
Yeah, right. Let's see it tomorrow.
since the Republican tax cuts of 2017 the debt grew over 25% in 4 years... now that was inflationary..... at the same time what does that have to to do with paying our debts, a constitutional obligation.,.......the budget is a separate issue.
  I'm a truth machine.
you wouldn’t know the truth if it had a sign on it that said ‘truth’
so first, what you are saying is the Bush and trump tax cuts worked
Progress on debt ceiling should be negative for the market because it is going to reduce the amount of free money that government spends on social programs such as SNAP, TANF etc will reduce. Also it will reduce many tax benefits such as EV Tax credit etc. These steps will reduce disposable income for US citizens. All of these should be negative for the market. I don't understand why the market is going up if debt ceiling deal is close.
The market just wants to go up. It doesn't really care about macro right now. Target guided down, yet the stock bashed through three major moving averages on the way up to new daily highs. Just buy pullbacks.
It's going to meet than a pullback. The markets can only ignore fundamental metrics for so long. A major flush is inevitable
Consumer spending is a key driver of economic growth.
Please Google debt ceiling. After reading several of the articles there is nothing to be optimistic about.
the government has been creating debt since 1776 .for the most part that debt has created American economic development that has created the richest nation in history....the debt is small relative to asset value you know the other side of the balance sheet...
wow that's a wild story. where can I buy some of that stuff?
I have listened to every speech from both sides. can someone tell me where the optimism is? Republicans want work for benefits and democrats say it's a non starter.
Work for benefits doesn't work. Half of the people on welfare have kids and can't work a minimum wage job and pay for child care. It's a Republican way of forcing people off welfare. They don't care what happens to them after.
This is just bs to make markets go up, while the economy is down, so asset managers can still profit
it doesn't require the sole caregiver to work. their are alot that do not fall into that category. if their are 2 people, 1 will have to work. only logical
Any manipulative news just to push stocks up tells you how people like Bernie Madoff and Donald Trump learn how to lie and cheat.....
America politicians creating debt ceilings is unconstitutional... according to the American constitution the faith and credit of the United States is to be respected and upheld as a primary responsibility of the American government. no matter what anyone thinks, that is a fact.... and no matter what right wing misinformation tells you.... paying the bills does not create inflation.
mark the're using economic blackmail, a refusal to pay our bills unless they get what is unconstitutional... according to the constitution there is no excuses when it comes to maintenance of the faith and credit of the United States, the bills must be paid.....the budget is a separate issue.....
And politicians, on both sides, spending vastly more money than the government had is unconstitutional
once again we have the revenue to pay our interest, so there is no violation of the constitution. all non essential spending will have to stop. maybe the democrats should have planned for that when they signed all the ridiculous spending.
it's all the Democrats fault inflation hello McFly
Trump created more money in two months than since the signing of the constitution mcfly lol
these evil Democrats idiots who support them idiots certified idiots and their liberal evil media persuade our nation to vote Democrat Time After Time After Time I am so glad I am civilly disobedient the corrupt federal government
Unlimited debt ceiling equals unlimited inflation.
casador del oso ...no it doesn't.....paying your bills doesn't create inflation.......
So the raising the "debt ceiling" doesn't mean allowing more debt to be accrued? Huh. Well I'll be. 🤡
I typically don't like to talk politics, but this time Biden is about to bury America once and for all.
I’m in my basement waiting for the next bio weapon to launch
Seriously?
Debt ceiling negotiation is also discussing cuts to tax subsidies and Govt spending on social programs.
The markets have been bullish since October.
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