Stock rose on Wednesday, driven by Tesla and after Western Alliance led a bounce among regional banks amid optimism about a potential breakthrough in the deadlock in Washington over the nation’s debt limit.
The Dow Jones Industrial Average jumped 379 points, or 1.2%, to 33,391, the Nasdaq climbed 1.1% and the S&P 500 was also up 1.1%.
Wall Street’s main indexes climbed to session highs by early afternoon trading as shares of Tesla extended gains to rise 3.9% after its annual shareholder meeting on Tuesday.
Top boss Elon Musk played down market rumors that he may step down as CEO of Tesla, touched upon two new mass-market models the company is developing, and reaffirmed that deliveries of its long-delayed Cybertruck pickup would start this year.
Regional banks rose, led by a 14% rise in Western Alliance Bancorp as the lender’s deposit growth exceeded $2 billion and brokerage Bank of America Global Research resumed coverage of the bank with a “buy” rating.
However, trading in the last few sessions has been in a limited range as investors await clarity on a resolution in the debt-ceiling debate, economic data and the path of the Federal Reserve’s monetary policy.
President Biden and top congressional Republican Kevin McCarthy said they would push ahead on talks to raise the nation’s $31.4 trillion debt ceiling and avoid an economically catastrophic default.
“If you look at the S&P 500, it’s been within just a 10 point range for six straight weeks, no one wants to be confident enough to go bullish or negative in a big way before this deal,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.
“It’s kind of a sideways waiting period. Most of the economic data we got this week has been pretty close to what was expected and so none of it’s really moved markets either.”
Retailers Target and TJX forecast current-quarter profit below expectations despite beating estimates for the first quarter.
Shares of Target were up 2.2%, while the T.J. Maxx parent dipped 0.5% in choppy trading.
“The US consumer is the wild card. They’re not completely withdrawn from the economy, that is hopeful for bullish economists,” said Keith Buchanan, portfolio manager at GLOBALT Investments.
Home Depot and a reading on April retail sales that missed expectations highlighted the impact of higher prices and interest rates on consumers.
Walmart’s shares edged 0.5% lower ahead of earnings on Thursday.