In the past few days, the impending default by the US government had made investors nervous. Now the topic is closed.
A conciliatory end to the US debt dispute has boosted Wall Street. Meanwhile, jobs data from the world’s largest economy was mixed and presented a double-edged sword for equity investors. The Dow Jones Industrial ended trading up 2.12 percent to 33,762.76 points. After losses in May, the most important Wall Street index posted a gain of 2.0 percent in the first week of June.
In the past few days, the impending default by the US government had made investors nervous. Now the issue is closed: After the House of Representatives, the Senate also approved the bill that will temporarily suspend the national debt ceiling in the USA.
The market-wide S&P 500 ended the last trading day of the week 1.45 percent higher at 4282.37 points. The Nasdaq 100 was up 0.73 percent to 14,546.64 points, bringing it up 1.7 percent for the week. However, it has long since outperformed the blue chips: Since the turn of the year it has risen by a third, while the Dow has not even gained two percent in the same period.
The labor market report for May sent contradictory signals: although the number of employed rose surprisingly sharply, the number of unemployed also increased noticeably – albeit from a low level. “Economic strength is inherently positive for stocks,” said portfolio manager Thomas Altmann of QC Partners. However, the still strong labor market could tempt the US Federal Reserve to raise interest rates overall, which in turn would mean headwind for the stock markets. “All in all, today’s labor market report is difficult to interpret for the stock market.” The Fed’s next interest rate decision is due in mid-June.