Dow jumps 700 points as US stocks soar at end of debt ceiling fight and strong jobs report in May

NYSE Trader smiles happy

Traders work during the New York Stock Exchange (NYSE) opening bell on March 13, 2020 on Wall Street in New York City.Johannes Eisele/AFP/Getty Images

  • The Dow Jones climbed 700 points to end the week as traders cheered the end of the debt ceiling fight.

  • The Senate voted to send the bill to increase the country’s borrowing limit for two years to Biden’s office.

  • Markets were also buoyed by strong nonfarm payrolls data that showed employers added 339,000 jobs in May.

U.S. stocks soared on Friday as markets felt optimistic about an end to the debt ceiling showdown and a strong May payrolls report.

The Dow Jones Industrial Average climbed 700 points, or more than 2%, climbing steadily throughout the session, while the Nasdaq and S&P 500 each rose more than 1%.

On Thursday night, the Senate voted to send the bill that would increase the US borrowing limit for two years to President Joe Biden’s office for signing. This decision ends weeks of tense negotiations that have brought the country to the brink of defaulting on some of its obligations. Treasury Secretary Janet Yellen had warned that the United States would run out of cash in early June without raising the debt ceiling.

Meanwhile, Friday morning markets got a glimpse of the still hot labor market. May nonfarm payrolls data showed employers added 339,000 jobs last month, beating past estimates of 180,000.

The strong reading could complicate the Federal Reserve’s approach to tackling inflation, though it was tempered by a rising unemployment rate and slower wage gains.

Markets had been expecting the Fed to suspend rate hikes at the next policy meeting this month, but a boiling labor market could convince officials to keep up the pressure to discourage any resurgence in inflation. On Friday afternoon, federal funds futures still showed about a 70% chance that the Fed would hold back on another rate hike, according to the CME FedWatch Tool.

Here’s where the U.S. indices stood at the 4 p.m. ET close on Friday:

Here’s what else is going on:

In commodities, bonds and crypto:

  • Oil was boosted by the good employment data in the United States. West Texas Intermediate crude jumped 2.75% to $72.03 a barrel. Brent, the international benchmark, rose 2.85% to $76.40.

  • Gold fell 1.5% to $1,966 an ounce.

  • The 10-year US Treasury yield rose eight basis points to 3.69%.

  • Bitcoin edged up 1.6% to $27,273.

Read the original article on Business Insider

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