US Stocks Close Higher As Investors Monitor Debt Ceiling Impasse And Digest Data

  • US stocks closed higher on Friday, with the Dow Jones up nearly 60 points, the S&P 500 rising 0.3%, and the Nasdaq gaining 0.5%.
  • Investor focus remained on the debt ceiling impasse, as the White House and Republican negotiators moved closer to a compromise agreement to extend the debt ceiling for two years.
  • Stronger-than-expected PCE inflation data reinforced expectations that the Federal Reserve will maintain its hawkish stance and keep interest rates elevated for an extended period.
  • Marvell Technology’s shares surged by almost 23% after the company projected a significant revenue increase attributed to its artificial intelligence technologies.
  • GAP saw its stock rise over 13% following better-than-expected earnings results.
  • The dollar index held near two-month highs above 104, driven by growing expectations of prolonged elevated US interest rates.
  • Recent economic data showed personal spending surpassing expectations, while durable goods orders unexpectedly increased.
  • The ongoing negotiations between the White House and Republicans indicated progress, raising the likelihood of a debt deal being reached before the deadline.

The E-mini S&P 500 experienced a significant surge, rising by approximately 1.1% to reach $4204, potentially aiming for the swing highs observed on the daily interval. As the market trades above the balanced price range once again, it should be noted that the upper distribution level may act as resistance, leading to long liquidation and a potential pullback. The higher inflation reading could be a reason for the US Federal Reserve to maintain the higher terminal rate for an extended period, which may have a bearish impact on equities.

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Regarding the median-term calculations for the equities sector, the bearish outlook persists, and the presence of slightly positive volatility in the medium term adds to the market’s bearish undertone.

The prospective resolution of the debt ceiling issue is currently serving as the primary driver of market support. The monetary perspective, coupled with upcoming economic data releases and investor sentiment, will play a crucial role in determining the market’s balanced behavior in the coming week.

It is worth noting that the recent strength of the dollar may lead to a bearish stance on commodities such as Gold or Copper. On the other hand, Crude oil could benefit from the higher value of the greenback in the short term.


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