U.S. Stock Market Reacts to Debt Ceiling Deal and Tech Surge, Job Market Data in Focus.

The U.S. stock market experienced a mixed performance as investors reacted to a tentative deal to raise the debt ceiling and a surge in tech stocks, particularly Nvidia. While the Dow Jones Industrial Average dipped 0.4%, the S&P 500 saw a marginal increase of 0.1%, and the NASDAQ Composite rose by 0.5%. The agreement on the debt ceiling, still awaiting finalization, includes limits on nondefense spending growth and the reallocation of unused funds previously allocated for combating COVID-19. Congress faces a deadline to raise or suspend the limit by early June, with the risk of defaulting on government debt payments if the deadline is not met.

However, the deal has not garnered unanimous support, setting the stage for a potential fight in the House. Some Republican members argue that the deal does not include sufficient spending cuts, while certain Democrats express reservations about provisions such as new work requirements for specific food assistance and other benefits.

Consumer confidence in the United States appeared stronger than expected, as the CB consumer confidence reading for May came in at 102.3, surpassing the anticipated 99. This positive sentiment likely contributed to the overall market stability.

Nvidia Corporation, a leading chipmaker, experienced a significant boost in its stock price, surging by 4.8%. The company unveiled a new range of artificial intelligence (AI) products, including an AI supercomputer designed to meet increasing customer demand. Nvidia’s stock valuation has now reached $1 trillion, soaring since the previous week when it predicted substantial revenue growth from its AI-related business.

Tesla, the electric vehicle manufacturer, also witnessed a rise in its stock price by 3.5% as CEO Elon Musk made his first visit to China in three years, meeting with the foreign minister. This development likely sparked optimism among investors regarding potential business opportunities and partnerships in the Chinese market.

In a positive sign for the travel industry, the Transportation Security Administration reported that it screened 9.8 million individuals traveling through airports during the holiday weekend, surpassing pre-pandemic figures from 2019. Consequently, shares of major airlines such as American Airlines Group, United Airlines Holdings Inc, and Southwest Airlines Company experienced gains, with increases of 1.4% for American Airlines, 1.4% for United Airlines, and 1% for Southwest Airlines.

The focus of the week in the U.S. stock market lies on job market data. The job openings report is scheduled for release on Wednesday, followed by the government’s comprehensive employment report for May on Friday morning. These reports will be closely analyzed by the Federal Reserve as it prepares for its next meeting to decide on interest rates. Futures traders currently indicate a 65% probability of the Fed raising rates by another quarter of a percentage point in June, highlighting the significance of the job market data in influencing the central bank’s decision.