Stocks explode as house strikes debt deal

Stock futures rose Thursday after the House passed a bill to raise the debt ceiling late Wednesday night.

Futures linked to the S&P 500 (^GSPC) rose 0.24%, while the Dow Jones Industrial Average (^DJI) hovered near the flatline and the strong Nasdaq Composite (^IXIC) technology component, gained 0.16%.

An impending default on US debt, which Treasury Secretary Janet Yellen said could occur as early as Monday, began to weigh on markets over the past week. But with the bill passing the House by a resounding vote of 314 to 117, investors are now awaiting action in the Senate.

“The deadline for raising the debt ceiling is rapidly approaching, and the likelihood of triggering a negative market reaction with severe economic consequences will only increase as the precipice approaches,” said the CEO of Business Roundtable, Joshua Bolten, in a statement after the House vote.

“We call on the Senate to eliminate the threat of default by passing this bipartisan bill as soon as possible,” he added.

The artificial intelligence hype train that has driven a rally in the Nasdaq since Nvida’s (NVDA) earnings report last week hit a speed bump after Wednesday’s close. (AI) fell more than 20% in premarket trading on Thursday after the company reported weaker-than-expected full-year revenue guidance. The AI ​​software developer expects revenue between $295 million and $320 million. Wall Street had hoped for $321 million, according to S&P Global Market Intelligence.

Shares of Salesforce (CRM) and CrowdStrike (CRWD) also stumbled in premarket trading. Salesforce fell more than 6% as investors insisted on capital spending growth of 36% in the quarter. CrowdStrike stock fell as its full-year earnings forecast came in at the low end of analysts’ expectations.

Meanwhile, retail sales profits continued to provide a mixed picture for consumer spending. After Wednesday’s bell, Nordstrom (JWN) beat analysts’ expectations as shares rose nearly 4% at Thursday’s open. But Thursday morning, Macy’s (M) struck a different tone. The retailer’s shares fell more than 7% after it lowered its full-year sales and earnings-per-share forecast.

“We planned the year assuming that consumer economic health would be in question, but beginning in late March, demand trends weakened further in our discretionary categories,” said the President and Chief Financial Officer. Macy’s executive Jeff Gennette in the company’s earnings release.

Photo By: NDZ/STAR MAX/IPx 2023 5/31/23 People walk past Macy's in Herald Square on May 31, 2023 in New York City.

Photo By: NDZ/STAR MAX/IPx 2023 5/31/23 People walk past Macy’s in Herald Square on May 31, 2023 in New York City.

On the economic front, jobless claims are expected Thursday morning. Economists predict 235,000 claims were filed in the week ending May 27, up from 229,000 the previous week.

Josh is a reporter for Yahoo Finance.

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