The benchmark S&P 500 index in the U.S. is at its highest level in nine months as investor sentiment towards stocks steadily improves.
Investor optimism is growing on signs that American lawmakers are getting close to a resolution on the debt-ceiling standoff and will be able to avert a first-ever default.
At the same time, the U.S. Federal Reserve has signalled a likely pause in interest rate increases and concerns about the stability of regional banks has eased.
As a result, the S&P 500 index closed on May 18 at a nine-month high while the technology-laden Nasdaq 100 index gained nearly 2% — hitting its highest level since April 2022. The Dow Jones Industrial Average rose 0.3% during the trading session.
Stocks got a boost after U.S. House Speaker Kevin McCarthy and Senate Majority Leader Chuck Schumer said they are making plans for votes in the coming days on a bipartisan deal to avert a U.S. debt default.
Swaps markets indicate that traders are placing a 40% likelihood that the U.S. central bank again raises interest rates at its next policy meeting in June, the lowest probability in a year.
Year-to-date, the S&P 500 index, which tracks the 500 largest stocks listed in the U.S. by market capitalization, has increased 10%.
The Nasdaq index, which is mostly comprised of tech stocks, has risen 22%, and the Dow Jones Industrial Average has gained 1% on the year.
In Canada, the benchmark Toronto Stock Exchange is up 4% so far in 2023.
