Stocks rose during the mid-day trading session on Wednesday after selling off on Tuesday as investors remain hopeful that the debt ceiling talks will lead to a breakthrough.
The S&P 500 (^GSPC) advanced 0.55%, while the Dow Jones Industrial Average (^DJI) rose 0.62%, or more than 200 points. The technology-heavy Nasdaq Composite (^IXIC) added 0.57% at noon.
Wall Street has been on edge as the White House and congressional leaders try to strike a deal to avert a looming US debt default. A smaller group of negotiators takes over as President Joe Biden travels to Asia, but he announced plans to cut his trip short this week.
Treasury Secretary Janet Yellen and others have warned of the catastrophic effects on the US economy in the event of a default, which is seen as likely to come as early as June.
On Wednesday, the yield on the 30-year Treasury fell to 3.86%. The yield on the 10-year note increased to 3.56%, while the yield on the two-year note rose to 4.14%. The dollar index strengthened, while gold prices fell.
“while [House Speaker Kevin] McCarthy said a deal is possible by the end of this week, and the schedule could be by the end of next week before Memorial Day,” JPMorgan’s US market intelligence team wrote in a note on Wednesday.
President Biden plans to stay in touch with McCarthy over the coming days. The team said any breakthrough in the talks could affect the markets.
“With this in mind, stocks may trade in a narrow range until an outcome is observed with the greatest downside risk coming if we enter Memorial Day weekend unresolved, given the X date in early June,” added the JPMorgan team.
Elsewhere, on the housing front, US housing grew 2.2% in April to 1.4 million housing units annually, according to Government data Released Wed. On an annual basis, this is still a decrease of 22.3%. Single-family startup rates rose 1.6% month over month to the highest level in 2023.
Building permits issued fell 1.5% to 1.41 million units annually in April and posted a 21.1% year-over-year decline, with multi-family building permits down 9.7% month-over-month.
Also on the agenda are earnings releases from retailers including Target (TGT) and The TJX Companies, Inc. (TJX) before the bell on Wednesday, which gave more insight into consumer health and a gauge of recession odds.
Target (TGT) topped Wall Street’s earnings forecasts, but struck a cautious tone with consumers, who are seen as reluctant to discretionary spending. The retailer directed second-quarter earnings below analyst estimates, dampening its outlook for the back-to-school shopping season. Shares gained more than 1% on Wednesday.
Meanwhile, TJX Companies, which owns TJ Maxx, Marshalls and Home Goods, posted first-quarter earnings while also providing disappointing guidance. Stocks fell on Wednesday.
In individual stock movements, shares of Tesla, Inc. rose. (TSLA) fell by more than 3% after the electric vehicle maker held its annual shareholder meeting after the bell on Tuesday. At the event, CEO Elon Musk said he had no plans to step down as CEO and retained his seat on the board for another term.
Shares of Wix.com Ltd. rose. (WIX) rose more than 1% on Wednesday after the cloud services developer reported a first-quarter net profit, helped by growth in subscription revenue.
Shares of Advanced Micro Devices, Inc. rose. (AMD) on Wednesday as Bernstein analyst Stacy Rasgon reiterated the market performance ratings in a note on Tuesday and the $80 stock forecast for AMD.
Danny Romero, Yahoo Finance correspondent. Follow her on Twitter @employee
Click here for the latest stock market news and in-depth analysis, including the events that move stocks
Read the latest financial and business news from Yahoo Finance
Download the Yahoo Finance app for apple or android
Follow Yahoo Finance on Twitter TwitterAnd FacebookAnd InstagramAnd FlipboardAnd linkedinAnd Youtube
Ford Motor Company sues Blue Cross Blue Shield in antitrust case alleging ‘astronomical’ profits
Google Wallet will allow you to add passes by taking a photo
China Factory Activity Poised To Surprise Growth In May – Caixin PMI