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The S&P 500 was up 1.1%, the Dow Jones Industrial Average gained 0.6%, or 194 points, and the Nasdaq gained 1.4%.
The Fiscal Responsibility Act that seeks to lift the debt limit and cut government spending was passed on late Wednesday, paving the way for the Senate to vote on the measure before it can be sent to President Biden’s desk to be signed into law.
Optimism that the lawmakers will be able to pass the legislative measure ahead of the June 5 X-date, or the day the U.S. will run out of money, lifted sentiment on stocks.
Energy was the biggest gainer following its recent malaise as oil prices jumped more than 3% ahead of the OPEC+ meeting this weekend, when major oil producers are expected to keep production unchanged.
Halliburton Company (NYSE:HAL), Baker Hughes Co (NASDAQ:BKR) and Schlumberger NV (NYSE:SLB) pushed energy higher, with the latter up more than 6% a day after the oil-field services company forecast revenue to rise at least 45% by 2025 compared with 2022.
Tech resumed its melt-up, meanwhile, with Meta Platforms Inc (NASDAQ:META)and Apple (NASDAQ:AAPL) leading to the upside ahead of the latter’s upcoming developer conference starting Monday. Apple is expected to talk up the prospect of further integrating and monetizing AI.
“[W]e are expecting Cook & Co. to discuss Apple’s AI strategy looking ahead and how the company can integrate and ultimately monetize its customer base around future generative AI coming from Cupertino,” Wedbush said in a note.
Salesforce Inc (NYSE:CRM), meanwhile, fell 4% after reporting quarterly that topped estimates, but signs of waning demand stoked worries about whether the software company would be able to meet guidance.
“The debate post this 1Q/Apr print is about the top-line and whether Salesforce can hit a 10%+ revs growth target in FY24/FY25,” UBS said in a note.
Elsewhere on the earnings front, Macy’s Inc (NYSE:M) cut losses to trade up 2% despite cutting its full-year outlook following quarterly revenue that fell short of Wall Street estimates as margin growth was held back by a ramp-up in promotions.
Nordstrom Inc (NYSE:JWN), however, reported a surprise quarterly profit, sending its shares more than 5% higher.
On the economic front, data continued to show the labor market remains strong as initial jobless claims rose, albeit by fewer than expected, while new jobs in the private sector for May topped estimates.
The stronger labor market data come just a day ahead of the nonfarm payrolls report due Friday that is expected to show the U.S. created about 180,000 jobs last month.
“Overall, upside risk to May payrolls comes from a higher than expected ADP print, still low initial and continued jobless claims, and an improvement in labor dynamics in the ISM Manufacturing Index,” Morgan Stanley said in a note.
