Hopes for a government debt deal push Wall Street higher

May 26 (Reuters) – All major Wall Street indexes rose more than 1% on Friday amid progress in talks on raising the US debt ceiling. Investors decided to ignore the data that pointed to slightly higher than expected inflation.

US President Joe Biden and Speaker of the House Kevin McCarthy are moving closer to a deal, an official familiar with the talks told Reuters.

“I am optimistic that the situation will be resolved as a US default is simply not an option. However, since the solution to the problem is market consensus, default will trigger a very strong reaction,” said Seema Shah of Principal Asset Management.

Data from the Commerce Department on Friday showed that U.S. personal spending rose 0.8% m/m in April, while the core price index, which reflects U.S. personal consumption excluding energy and food (core PCE), rose by 0.8%. .4%.

Money market traders now estimate a 60% chance of a 25bps rate hike by the Fed at the June meeting, up from a 40% chance before the data was released.

The Dow Jones index was up 1.08% to 33,121.02 points by 6pm Moscow time, the S&P 500 was up 1.22% to 4,200.98 points and the Nasdaq was up 1.80% to 12,926.78 points.

Ford Motor Co shares rose 0.9% on a deal allowing automaker customers to access more than 12,000 Tesla Inc North American chargers in early 2024. Tesla shares rose 3.7%.

A day after Nvidia posted some of the biggest session gains on U.S. stock markets, the chip maker’s shares rose 1.6% and Marvell Technology Inc’s shares rose 27.9% after being forecast to double annual sales of artificial intelligence chips.

Paramount Global added 6.0% after the company’s controlling shareholder, National Amusements, raised a $125 million investment and Loop Capital raised the media conglomerate’s stock to Hold.

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(Sreyasha Sanyal and Shristi Achar A in Bangalore, translated by Tomas Kanik)