US: Stocks close higher on optimism of debt ceiling deal

ALL three major US stock indexes closed the day higher on Friday amid optimism that a deal to avert a potentially catastrophic US debt default was close at hand. Democrats and Republicans inched towards a deal on Friday, with just days to go before the Treasury Department warned the United States could run out of money to pay all of its existing spending obligations.

The broad-based S&P 500 rose 1.3 per cent to 4,205.45, while the Dow Jones Industrial Average posted a more modest 1.0 per cent gain to finish the week at 33,093.34.

“The market is rising on the hope that they probably will be announcing very soon that we avert the default,” Peter Cardillo from Spartan Capital Securities told AFP.

The Nasdaq soared to finish the day up 2.2 per cent at 12,975.69, fueled by a continued rally in tech- stocks like Nvidia which stand to benefit the widespread adoption of artificial intelligence.

On Friday afternoon, Treasury Secretary Janet Yellen said the new figures suggested the so-called X-date when the US runs out of money to pay all its bills could come as soon as June 5, four days later than previously forecast.

“Based on the most recent available data, we now estimate that Treasury will have insufficient resources to satisfy the government’s obligations if Congress has not raised or suspended the debt limit by June 5,” she wrote in a letter to the Republican Speaker of the House, Kevin McCarthy. AFP

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