Shares rose during midday trading on Wednesday after Tuesday’s sell-off, as investors still hope that the negotiations on the debt ceiling will provide a breakthrough.
The S&P 500 (^GSPC) rose 0.55%, while the Dow Jones Industrial Average (^DJI) gained 0.62%, or more than 200 points. The tech-heavy Nasdaq Composite (^IXIC) was up 0.57% at noon.
Wall Street has been kept on its toes as the White House and congressional leaders try to hammer out a deal to avoid a looming US debt default. A smaller group of negotiators is taking over as President Joe Biden travels to Asia, but he has announced plans to cut the trip short this week.
Treasury Secretary Janet Yellen and others have warned of catastrophic effects on the US economy in the event of a default, which is expected to come as early as June.
On Wednesday, the interest rate on the 30-year government bond fell to 3.86%. The yield on the 1[ads1]0-year note rose to 3.56%, while the two-year note yield traded up to 4.14%. The dollar index strengthened, while gold prices weakened.
“While [House Speaker Kevin] McCarthy said a deal is possible by the end of this week, the timeline could be by the end of next week ahead of Memorial Day, JPMorgan’s U.S. market intelligence team wrote in a note Wednesday.
President Biden plans to stay in touch with McCarthy in the coming days. Any breakthrough in the talks could potentially affect markets, the team said.
“With that in mind, stocks could be trading in a tight range until an outcome is observed with the greatest downside risk if we go into the Memorial Day weekend without a resolution, given the early June X date,” the JPMorgan team added.
Elsewhere, on the housing front, U.S. housing starts grew 2.2% in April to 1.4 million units year-on-year, according to government data released Wednesday. On an annual basis, there is still a fall of 22.3%. Single-family starts rose 1.6% month-over-month to the highest level in 2023.
Building permits issued fell 1.5% to 1.41 million units year-over-year in April and recorded a 21.1% year-over-year decline, as multifamily permits issued fell 9.7% month-over-month.
Also on the docket were earnings reports from retailers including Target ( TGT ) and The TJX Companies, Inc. ( TJX ) before the bell Wednesday, providing further insight into consumer health and a gauge of recession probabilities.
Target ( TGT ) topped Wall Street’s earnings expectations but took a cautious tone on consumers, seen as hesitant about discretionary spending. The retailer led second-quarter earnings below analyst estimates, dampening views of the back-to-school shopping season. Shares rose more than 1% on Wednesday.
Meanwhile, The TJX Companies, which owns TJ Maxx, Marshalls and Home Goods, posted a first-quarter earnings beat while offering disappointing guidance. The stock fell on Wednesday.
In individual stock moves, shares of Tesla, Inc. ( TSLA ) rose more than 3% after the electric car maker held its annual shareholder meeting after midnight on Tuesday. At the event, CEO Elon Musk said he has no plans to step down as CEO and retained the board seat for another term.
The shares of Wix.com Ltd. ( WIX ) rose more than 1% on Wednesday after the cloud services developer posted a first-quarter net profit, boosted by growth in subscription revenue.
Advanced Micro Devices, Inc. (AMD) shares pushed higher on Wednesday as Bernstein analyst Stacy Rasgon reiterated his Market-Perform ratings in a note on Tuesday and $80 share forecast for AMD.
Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv
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