4:10pm: US stocks recover at the close
US stocks staged a recovery at the close, led by the Nasdaq’s run higher on NVIDIA’s stellar results.
At 4pm, the S&P 500 was up 1.3% at 4,205, the Dow was 1% higher at 33,093 and the Nasdaq was 2.2% higher at 12,976 points.
Next week, investors will be eyeing new jobs data for signs of the resilience of the US economy amid concerns that a slowing economy will start to see jobs growth falter.
“While the monthly payrolls numbers have been slowing in terms of the numbers of jobs being added on a monthly basis, economists have consistently underestimated the resilience of the labour market over the last few months, even with the recent turmoil in the banking sector hitting business and consumer confidence,” Michael Hewson of CMC Markets noted.
Next week’s jobs numbers are expected to see 180,000 jobs added, and the unemployment rate to edge higher to 3.5%.
12.05pm: Nasdaq up nearly 2% as AI hype continues
US stocks advanced sharply in noon trading as investors were optimistic about a potential US debt ceiling deal.
At midday, the Dow gained 277 points to 32,042, while the S&P 500 added 44 points at 4,195 and the tech-heavy Nasdaq climbed 235 points to 12,933.
“Once a debt deal is done, markets will have to deal with the harsh reality that the Fed is going to kill this economy,” Oanda senior market analyst Ed Moya wrote in a note.
“The end of tightening might not occur until the end of summer and that means we will probably get bigger rate cuts next year,” he added.
Other notable movers included shares of Marvell Technology Inc, which soared 27% after the semiconductor maker beat 1Q analyst estimates on both its top and bottom lines and the company said it expects its revenue growth will accelerate in the second half of the fiscal year.
9:41pm: Sources indicate a deal is close, per reports
Shortly after the opening bell, the Dow was up 80 points, 0.3%, to 32,845, the Nasdaq Composite added 60 points, 0.5%, to 12,758 and the S&P 500 improved 12 points, 0.3%, to 4,163.
Investors continue to watch for a resolution to ongoing debt ceiling talks between President Biden and Republican House Speaker Kevin McCarthy. The sides are reportedly close to a deal that would raise the debt ceiling for two years, according to reporting from CNBC.
“With the market rejoicing in Nvidia’s earnings report and guidance, plus a positive report from Main Street’s iconic Best Buy, headlines pointing to a debt ceiling resolution could finally help lift a broader underpinning of the market,” said Quincy Krosby, chief global strategist of LPL Financial.
7:45am: Hopes high for debt ceiling deal
US stocks are expected to edge higher at the open on Friday amid raised hopes for a US debt ceiling deal ahead of the long Memorial Day weekend, although underlying caution remains with the Federal Reserve's preferred measure of inflation due for release today.
In pre-market trading, futures for the Dow Jones Industrial Average (DJIA) were up 0.2%, while those for the S&P 500 index added 0.3%, and contracts for the Nasdaq 100 rose 0.4%.
On Thursday. the DJIA closed 35 points, or 0.1% lower at 32,764, but the S&P 500 gained 0.9%, and the Nasdaq Composite jumped 1.7%, reflecting a boost for tech issues after above-forecast numbers from chip firm Nvidia.
Joshua Mahony. chief market analyst at Scope Markets commented: "With the clock ticking on those debt ceiling negotiations and Congress having closed up for a long weekend break, there’s, without doubt, a degree of caution building over what happens next, but the prospect of the US defaulting on its debt repayments appears too far-fetched to become a reality.
"In a world where the US is increasingly struggling to appear like the dominant player, failure here would presumably be seen as a step too far for even the most outspoken of politicians, hence the fact that downside pressures in futures markets look so limited."
He added: "With that in mind, the run into the weekend break seems set to be relatively subdued but the release of the PCE Price Index – seen as the Fed’s preferred measure of inflation – will be closely watched. Opinions are divided as to whether the Fed will be able to resist the temptation to keep hiking rates but any one reading here has the potential to lend support to policy doves."
The Personal Consumption Expenditures (PCE) deflator is expected to rise to 4.4% in April, up from 4.2% in March, while other personal spending figures are expected to show a growth of 0.4% on a monthly basis, indicating that consumer outlays remain robust, supported by increases in personal incomes.
The Federal Reserve appears more inclined to pause its interest rate hikes in June, but positive surprises in economic data and a more hawkish tone from policymakers could alter market expectations.