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Optimism about the debt ceiling deal causes the Nasdaq and S&P 500 to close at their best levels since August: constant updates

On Thursday, the stock market saw gains after the U.S. House of Representatives passed a debt ceiling bill, a crucial step to avoid a default. The Dow Jones Industrial Average rose by 153.3 points, or 0.47%, closing at 33,061.57. Despite a 4.7% decline in Salesforce shares following its earnings report, the market remained positive. The S&P 500 also experienced growth, gaining 0.99% to end at 4,221.02, while the Nasdaq Composite added 1.28% to close at 13,100.98. Notably, both the S&P 500 and Nasdaq reached their highest levels since August 2022.

The Fiscal Responsibility Act, which passed with bipartisan support by a vote of 314-117, will now move to the Senate for further consideration. Senate Majority Leader Chuck Schumer stated that the Senate will stay in session until the bill is sent to President Biden’s desk. This positive development helped remove some uncertainty from the market, according to Ross Mayfield, an investment strategy analyst at Baird.

Investors are also looking ahead to the Federal Reserve’s upcoming policy meeting on June 13-14 as a potential market catalyst. Philadelphia Fed President Patrick Harker expressed his belief that the central bank is nearing the point of being able to halt interest rate hikes. However, he noted that the payrolls report, released on Friday, could impact his vote at the meeting.

Data from ADP showed better-than-expected growth in private payrolls for May, while the number of jobless claims filed last week was lower than economists’ forecasts. The labor market has been closely monitored, as its strength could influence the Fed’s decision on raising interest rates.

As the week concludes, the Nasdaq is on track for six consecutive weekly gains, a streak not seen since January 2020, with a nearly 1% increase week to date. The S&P 500 is expected to end around 0.4% higher, while the Dow is poised to decline by 0.1% for the week.

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