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U.S. stocks are rising on optimism about debt ceiling talks

AuthorLiz Moyer
Published 05/17/2023, 10:30 AM
Updated 05/17/2023, 11:46 AM
© Reuters.

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

At 11:40 ET (15:40 GMT), the Dow Jones Industrial Average was up 162 points or 0.5%, while the S&P 500 was up 0.5% and the NASDAQ Composite was up 0.5%.

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.

Retailers continue to report earnings this week. It was Target Corporation's (NYSE:TGT) day this morning, 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 rose 2.8%.

TJX Companies, Inc. (NYSE:TJX), the parent of T.J. Maxx, fell short of revenue estimates for first quarter earnings. Shares rose 1.4%.

Western Alliance Bancorporation (NYSE:WAL) shares rose 13% 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 17.9% and 10.4%, respectively.

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Tesla, Inc. (NASDAQ:TSLA) shares edged 4.2% higher 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.

Latest comments

no surprise there, russia/trump cuck stevie swallowing putins propaganda hook, line and sinker...
There is lying America hater Stephen Fa, and then there is reality. What CNN is actually reporting: "The damage to a Patriot air defense system following a Russian missile attack near Kyiv on Tuesday morning is minimal..."
CNN reports US taxpayer funded $150 million Patriot missile defense system taken out by Russian hypersonic missile in Ukraine.
Kremlin claims that and Ukraine denies that.  US says likely suffered some damage from a Russian strike and it did not appear to have been destroyed.  No surprise you took Kremlin's word.  Russian missile defense systems have also been taken out by Ukrainians in Ukraine.
you'll pay 150 billions if putin reaches what he wants
Elon is focusing on bonking the new CEO at twitter and bringing a few more little Elon's into the world
They haven’t even fallen yet due to pessimism… Rigged
facing adverse conditions, sell in May.
no money, liquidity, in stick market, no honey stock mkt rally
fed rate hiking odds increasing indicate no debt limit compromise soon
bon prices falling today indicate no debt limit compromise soon.
Debt limit deal will give the Fed room to raise rate which leads to bond down
No deal will also lead to default --> US credit rating cut --> higher rates
More debt means higher stocks....
Meanwhile, actual performance of the companies issuing those stocks has become irrelevant.
What I've seen is no movement on the debt ceiling crisis and no optimism!
It’s a false narrative to continue manipulating the market. It will crash only once short sellers give up the last bit of hope
  A short squeeze doesn't lead to crash..
  McCarthy got his Speaker position only by promising his Party's right-wing extremists their wet dreams.
The level of raw ignorance in these comments is mind blowing. You all deserve to be broke.
every opinion he shares is the party line but thanks for sticking up for your fellow 🐑
  "You all deserve to be broke" is a sentence more likely said by a Republican than a Dem.
... and more likely than a socialist.
I totally disagree with raising the debt ceiling, but I can understand the markets going up. From their point of view it's great to see the government spending more money as it means more orders/jobs/projects and therefore growth. The government is the best client you can have as they pay well and there is little to no risk. Is it wise? No! Is it sustainable? No! Is it fair towards tax payers? No! Is it great for stocks? You bet!
Good point. When does it become unsustainable?
While FED continues to raise rates, reduce their balance sheet, decreasing the money supply, as banks falter, and retail post bad results. Yes lots to be bullish about.
Wow, the sun didn't supernova today, buy stocks!
Sums it up perfectly.
The American Stock market continues to be the greatest fraudulent financial instrument in the history of the world.
So us stocks rise for a year if talks about debt ceiling take a year lol. And like raising debt ceiling was some kind of a good thing. More debt and more interest. Sounds very healthy. Joke stock market of the World continues giving us even more jokes.
Exactly Absurd continues
Whatever action the US government has taken on the debt ceiling is a futile exercise, first, stop printing paper currency and convert the gold-equivalent paper currency into dollars.
"convert the gold-equivalent paper currency into dollars." What does that even mean?
If higher interest rates causes problems servicing debt, then the amount of debt needs to be reduced. A fantasy given the current regime.
The scary thing is that there has been no landing, soft or otherwise. The markets are still at a double top and pushing a parabolic double top. The Fed is right, more work needs to be done. Cash is King!
Your cash is declining in value to the tune of about 5% per year.
ever debt agency which rates us government as the highest level should be immediately banned from world markets and investigated for manipulation as should the US government for sate intervention in financial markets as there is absolutely no rational reason for US government debt to hold the highest grade even with a debt ceiling deal.
Just because you don't understand it doesn't mean there aren't good reasons which include 250 years of always paying its debts; a legal framework that protects financial instruments; a regulatory environment that provides stability; the worlds largest economy; and belief that a representative democracy is not likely to lead to a kleptocracy. You might not like those reasons, but those are the reasons.
It's scary that you honestly believe it. It's a Ponzi scheme.
a regulatory environment that stability what world are you living in?, they also often downgrade countries for reasons that a plagued the US just look at fitches downgrade of France recently claiming high government debt, slowing growth, deflict spending and even used the protest as a reason. the US also has the first 3 issues . let's face it they refused to downgrade mbs and major banks in 08 until it was to late did the same again this year with smaller banks. they are just manipulative tool used by the wall street and the US state.
I hate wall street and DC. the 69 they do to prep themselves before they forcefully penetrate the US populace against its will makes them criminal and subject to capital punishment.
IQ can be less than zero, you just proved it Sir.
 this is an AI hype pump from five nasdaq mega cap stocks - the rest of the nasdaq and rest of the indices are all struggling - huge rug pull coming very soon!!! huge global recession has already started if you know where to look!
 It's because of debt ceiling optimism and the parties negotiating. Q1 earnings, inflation numbers and other factors are lessening the likelihood of a recession. Look at the CPI.
Biggest investment JOKE in the world.
Imagine an unlimited debt ceiling. Politicians could spend freely without considering any consequences, like inflation.
A debt ceiling rise should be taken for granted. Markets should not rise due to something that is critical. It's like saying markets are rising because they are going up.
back in 2011 markets sold off getting closer to debt ceiling. This is a different market today. It rallies on every crises aversion, but never sells off. We have never seen markets with such little fear.
RECESSION, RELUCTANT CONSUMERS, INEVITA LE STOCK MARKET CRASH
ineed US consumer is maxing out on credit cards and buy now pay later just for basic essential items and the wealthy US consumer from the tech and finance industries are being laid off in their droves - the writing is on the wall!!! exports from China and Korea plunged over the past month or so. the market just hasn't woken up to it yet
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