HomeFinanceNasdaq hits 9-month high after batch of upbeat economic data, debt-ceiling optimism

Nasdaq hits 9-month high after batch of upbeat economic data, debt-ceiling optimism

U.S. stocks advanced Thursday, with the Nasdaq Composite hitting a fresh 9-month high, as a batch of mostly upbeat economic data overshadowed a senior Federal Reserve policymaker’s call for more interest-rate hikes.

How are stocks trading

  • The S&P 500

    rose 15 points, or 0.7%, to 4,185.

  • The Dow Jones Industrial Average

    was down 79 pount, or 0.2%, to 33,420.

  • The Nasdaq Composite

    rose by 137 points, or 1.1%, to 12,636.

On Wednesday, the Dow rose 409 points, or 1.2%, to 33,421, which could help the blue-chip average avoid a third-consecutive weekly drop.

What’s driving markets

U.S. stocks opened mostly lower on Thursday as earnings from Walmart Inc.

suggested the U.S. consumer’s strength might be waning, while Dallas Federal Reserve Bank President Lorie Logan said economic data don’t support Fed Chairman Jerome Powell’s push to pause the central bank’s rate-hiking campaign.

In U.S. economic data, the number of Americans who applied for unemployment benefits in mid-May sank to 242,000, aided by efforts in Massachusetts to counter a recent spike in fraudulent claims.

However, stocks soon bounced and powered higher during the morning session as a report on existing-home sales and a spate of other data showed the U.S. economy is in better shape than many economists had expected, said Art Hogan, chief market strategist at B.Riley Wealth.

“We see the housing market that has more demand, which is a positive economic reading,” Hogan said during a phone interview.

Both Target

and Walmart shared guidance that hinted at weakening discretionary spending by American consumers. Still, economic data on retail sales and corporate earnings reports from a smattering of America’s largest retailers offered a mixed picture of the consumers’ strength, said Kim Caughey Forrest, founder and chief investment officer at Bokeh Capital Partners.

“Are things getting better for the consumer? or are they getting worse? We don’t really have an answer yet,” Forrest said during a phone interview.

“The guidance from a lot of these retailers has been pretty mediocre in terms of the state of the consumer,” said Matt Maley, chief market strategist at Miller Tabak + Co. during a phone interview.

Meanwhile, Fed-funds futures traders now see a 40.2% chance of another quarter-of-a-percentage-point rate hike by the Fed following Logan’s prepared remarks.

House Speaker Kevin McCarthy’s comments that a debt-ceiling deal could be reached as early as next week have helped to boost the Nasdaq while helping to keep stocks from seeing an even bigger selloff, Maley said.

Still, “I don’t think either equity traders nor bond traders are expecting a default,” Maley added.

Read: ‘Doomsday machine’: Here’s what could happen if the debt ceiling is breached

U.S. stocks have been trading in a tight range in recent months, with the S&P 500 vacillating within a range of just 65 points — between 4,100 and 4,165 — over the past 10 sessions.

Investors received a flurry of economic data reports, including jobless claims and the Philadelphia Fed factory survey for May — followed by existing-home sales numbers for April.

Companies in focus

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