The Dow (INDU
) was up around 440 points, or 1.3%, in late afternoon trading, while the broader S&P 500 (SPX
) rose 1.2%. The tech-heavy Nasdaq Composite (COMP
) increased by 1.5%. The rally isn’t just boosting just certain stocks but is much more broadly based.
Meanwhile, the yield on the 10-year US Treasury bond also rose to 1.57%.
The US equity market has been on a roller coaster of late. Investors are struggling with worries about inflation, the US debt ceiling, the Evergrande debt crisis, and the general state of the recovery.
Things were looking up after Senate Minority Leader Mitch McConnell offered options on Wednesday to prevent America from defaulting on its debts. Republicans had previously shut down Democrats’ proposals to raise the debt ceiling, but a deal was announced early Thursday. On top of that, weekly claims for unemployment benefits came in lower than expected and below the prior week’s level.
“Progress in debt ceiling talks is boosting the mood in the market. The proposed deal in Washington will effectively see the can kicked down the road to December buying time and easing concerns,” Fiona Cincotta, senior financial markets analyst at City Index, said in a note to clients. “Whilst this is clearly a short-term answer, it is enough to keep the markets happy.”