U.S. stocks are rising to begin October after the federal government in Washington, D.C. narrowly avoided a shutdown over the weekend.
Congress passed a stopgap funding bill late on September 30th with Democratic support after Republican House Speaker Kevin McCarthy backed down from earlier demands among his political party's conservative hardliners for partisan legislation.
The benchmark S&P 500 index is up 0.31% in premarket trading, while the tech-laden Nasdaq Composite index is up 0.52% in early market action.
Stocks are also rising after the U.S. Federal Reserve’s preferred inflation gauge came in at a two-year low for the month of August, indicating that there might not be a need for further interest rate hikes.
Investors now turn to comments Fed Chair Jerome Powell is scheduled to deliver later today (October 2) at a roundtable discussion with small business owners. Expectations are that Powell will provide some insights into the central bank’s current thinking on interest rates.
Major economic data later this week, including U.S. manufacturing activity and the monthly labour report, could also provide clues on the Fed's likely interest-rate path going forward.
Yields on the 10-year Treasury note edged higher on Monday, with the two-year note, which reflects interest rate expectations, still above 5%.
Cryptocurrencies continue to rise as well, with the price of Bitcoin (BTC), the biggest digital asset by market capitalization, up 5% and trading above $28,000 U.S. for the first time in two months.
