Stocks rally Friday on hopes for a debt ceiling deal, Nasdaq notches fifth straight week of wins: Live updates

Stocks jumped Friday as traders grew hopeful that lawmakers will reach a deal to raise the U.S. debt ceiling, avoiding a potentially catastrophic default.

The Dow Jones Industrial Average climbed 328.69 points, or 1% to settle at 33,093.34. The S&P 500 gained 1.3% to close at 4,205.45, and the Nasdaq Composite advanced 2.2% to 12,975.69.

Intel and American Express rose 5.8% and 4.1%, respectively to lead the Dow higher. The S&P 500 tech and consumer discretionary sectors popped more than 2% each.

The Nasdaq notched its fifth straight weekly gain, rising 2.5%. The S&P 500 also posted a one-week advanced, advancing 0.3%. The Dow was the laggard this week, losing 1%.

Congressional and Biden administration negotiators were zeroing in on a deal that would increase the U.S. debt limit for two years. House Speaker Kevin McCarthy said talks Thursday night yielded progress, but added: “We’ve got to make more progress now.”

Treasury Secretary Janet Yellen has warned that the U.S. could default as soon as June 1 if the debt ceiling is not raised. Economists and Wall Street leaders have also raised concern over the possibly devastating impact of a U.S. debt default.

“Once a debt deal is done, markets will have to deal with the harsh reality that the Fed is going to kill this economy,” Ed Moya, senior market analyst at Oanda, wrote on Friday. “The end of tightening might not occur until the end of summer and that means we will probably get bigger rate cuts next year.”

New data out Friday morning showed inflation rose more than expected in April. The personal consumption expenditures index, the Federal Reserve’s preferred gauge of price pressures, increased 0.4% last month and 4.7% from a year earlier.