The major averages ticked higher into the end of the trading session, with the broad-market index adding 0.94% to end at 4,198.05. The Dow Jones Industrial Average finished up 115.14 points, or 0.34%, to close at 33,535.91 after trading down for most of the session. The tech-heavy Nasdaq gained 1.51% to finish at 12,688.84. The day marked a second consecutive positive session for the major averages.
Thursday's advance boosted weekly gains for the indexes. The Nasdaq has led the charge up, on pace to end the week 3.3% higher. The S&P 500 and Dow are poised to end the week up 1.8% and 0.7%, respectively.
House Speaker Kevin McCarthy said Thursday that he's optimistic congressional negotiators could reach a deal in time for a House vote next week.
"I see the path that we can come to an agreement," McCarthy said. "And I think we have a structure now and everybody's working hard, and I mean, we're working two or three times a day, then going back getting more numbers."
His comments come with just two weeks until June 1, which is the earliest day the U.S. could default, according to Treasury Secretary Janet Yellen. Jeff Kilburg, CEO of KKM Financial, said traders have been able to "look through" some of the drama surrounding the debt ceiling negotiations.
"I think the debt ceiling is personally a lot of noise, but I think investors and even traders are having a hard time ignoring," Kilburg said. "I have optimism on the market, but also optimism that we're going to find a way to move forward. The U.S. government's never truly going to walk away from their default."
Retail giant Walmart helped the market, adding 1.3% on the back of its strong financial report. The company beat Wall Street forecasts on both earnings per share and revenue in its first quarter and raised its expectations for full-year performance.
But investors' sentiment was reined in somewhat after Dallas Fed President Lorie Logan said the latest economic data doesn't argue for a pause in rate hikes yet. She noted the June policy decision will be based on inflation and employment data that hasn't been released yet.
"As financial markets have been obsessing about the state of debt ceiling negotiations, the airwaves have also hosted an onslaught of Fed speakers, who have seemingly been tasked with sending a message to the markets," said Quincy Krosby, chief global strategist at LPL Financial. "The message, that the Fed, at this point, has no plans to cut rates this year, but now also introducing the possibility that another rate hike could be forthcoming at the June 13-14 meeting."
Stocks close higher
Nasdaq Composite performance eerily reminiscent of TMT bubble, Wolfe Research says
There are eerie parallels between the recent performance of the Nasdaq Composite Index and its behavior in the aftermath of the Tech/Media/Telecom bubble that topped out in March 2000, Wolfe Research said in a note Thursday.
"Rallies following Nasdaq's peak in March 2000 were not sustained as breadth continued to deteriorate," analyst led by Chris Senyek wrote. As was the case then, sales and earnings at the largest tech stocks leading the market "won't escape the upcoming recession. As such, our sense remains that it won't be different this time."
Citi names Meta Platforms as top pick among internet companies
Citi listed Facebook-parent company Meta Platforms as the top pick in the North America internet segment, thanks to strong ad products and further investment into language learn models.
"We highlight Meta here, our top pick, with newer ad products like Advantage+, Click-to-Message, and Sponsored Reels delivering ROAS above pre-IDFA levels as engagement ramps," Citi analyst Ronald Josey wrote in a Thursday note.
Meta is set to gain further from a recovery in revenue from ads for internet companies, Josey said, especially as more volatile trends stabilize. Meta stock has been on fire so far this year with a 103.5% gain.
— Brian Evans
Goldman Sachs calls artificial intelligence one of the biggest tailwinds for profit margins over next decade
Artificial intelligence tailwinds could provide a significant lift to profit margins over the next decade, according to Goldman Sachs.
"Artificial intelligence represents the biggest potential long-term support for profit margins," the Wall Street firm said in a recent note to clients. "Our economists' productivity estimates suggest AI could boost net margins by nearly 400 bp over a decade."
Goldman forecasts that widespread adoption should boost U.S. productivity growth by 1.5 percentage points annually over the next decade.
"Based on the historical relationship between productivity growth and corporate profitability, this boost could lift S&P 500 net profit margins by roughly 4 pp over that decade, holding all else equal," Goldman said.
Despite these nearer-term tailwinds, Goldman noted that uncertainties surrounding government policy and widespread adoption linger, denting its ability to project the longer-term impacts of AI on corporate profits.
— Samantha Subin
NYSE advancers lead decliners heading into the close
Advancers at the New York Stock Exchange held a slight advantage over decliners with less than one hour left of trading. About 1,500 NYSE-listed names were higher, while 1,300 others declined.
— Fred Imbert
Carl Icahn says he made a mistake betting against the market, the FT says
Longtime investor Carl Icahn admitted to the Financial Times that he made a mistake by betting against the market, which cost him billions of dollars.
The activist investor has lost nearly $9 billion in a bearish bet or hedging position that stretched back to 2017, according to the FT's analysis based on regulatory filings.
"I've always told people there is nobody who can really pick the market on a short-term or an intermediate-term basis," Icahn told the FT. "Maybe I made the mistake of not adhering to my own advice in recent years."
— Yun Li
S&P 500 and Nasdaq Composite remain up heading into final hour of trading
Consumers are spending on essentials and looking for value, says Dana Telsey
Consumers are all about spending on essentials and finding value, which helped Walmart's latest