Dow surges over 700 points as investors cheer jobs report and debt ceiling deal
A trader on the floor at the New York Stock Exchange (NYSE) in New York during the opening bell on May 22
By Krystal Hur, CNN
New York (CNN) — The Dow surged over 700 points mid-afternoon Friday as investors applauded Congress’s passage of the debt ceiling deal and celebrated a cheerful jobs report.
The blue-chip index soared 734 points, or 2.2%, putting it on track for the best daily gain since November 2022. The S&P 500 gained 1.6% and the Nasdaq Composite rose 1.2%.
All three major indexes are on pace to gain for the week, with the Dow and S&P 500 headed for their best weeks since March. The Nasdaq is on track to notch its sixth consecutive week up.
The stock market’s gains come after the Senate passed the debt ceiling deal in a Thursday evening vote, leaving investors anticipating an end to weeks of concern that the United States could default on its debt for the first time.
A mixed May jobs report also helped boost stocks. While the headline jobs number of 339,000 showed that the US labor market is still extremely robust, the report also revealed a slight cooldown in average hourly wages and an increase in the unemployment rate.
“Moving past the debt ceiling and receiving somewhat of a goldilocks employment report — solid jobs with slowing wage growth and a higher unemployment report — has provided a one-two punch that has boosted confidence of investors who were sidelined and allayed some near-term recession concerns,” wrote Keith Lerner, co-chief investment officer at Truist Advisory Services.
Futures traders are pricing in an interest rate pause at the Fed’s next meeting on June 13-14, according to the CME FedWatch Tool. But markets still see a 29% chance that the central bank hikes rates by a quarter point after contrasting signs about the labor market’s health in the jobs report, and some investors remain divided on whether the central bank will hike in July, or pause.
“The May jobs report is a particularly difficult one for the Fed to parse,” Bank of America economists wrote in a Friday note. “We think the May jobs report is just soft enough to justify a hold.”
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