US Stocks Forecast: Bulls move in despite debt ceiling risks

FX
  • Dow Jones Industrial Average rose  0.27%, to 34,390.92.
  • The S&P 500 added 6.86 points, or 0.16% and the Nasdaq Composite fell 34.24 points or 0.24%.

Wednesday was kinder to stocks on Wall Street, although the US Federal Reserve Chairman Jerome Powell and the ongoing debt ceiling debate hindered progress in the benchmarks. Both the Dow and the S&P 500 index rose but the Nasdaq Composite ended on the backfoot as risk-off remains the main theme. 

The Fed’s chairman, Powell, who joined other central bankers at a European Central Bank event, showed that central bankers are concerned about persistent supply chain woes and the implications for higher and longer inflation timelines. Nevertheless, the stock market did not mind and even brushed aside the risks of negotiation failures on Capitol Hill over funding the government. The Friday deadline looms. 

The House Democrat leaders remain far short of votes they need to pass an infrastructure bill. The Senate GOP is still blocking the Dems’ ability to raising the debt limit on the floor and say it needs to be done through reconciliation. The extent of the economic costs of the debt limit binding, while assuredly negative, are enormously uncertain.

Meanwhile,  the Dow Jones Industrial Average rose 90.93 points, or 0.27%, to 34,390.92, the S&P 500 added 6.86 points, or 0.16%, to 4,359.49 and the Nasdaq Composite lost 34.24 points, or 0.24%, to 14,512.44. All three of these benchmarks are on course to post monthly declines, with the bellwether S&P 500 ending a seven-month winning streak.

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