Stock market today: Asian markets mostly higher after Biden-McCarthy deal on US debt

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In the rain, a person stands in front of a Nikkei index electronic board at a Tokyo securities firm on Monday, May 29th, 2023. Asian shares are mostly up after President Joe Biden, House Speaker Kevin McCarthy and reached an agreement to raise the U.S. debt ceiling.

Eugene Hoshiko/AP

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In the rain, a person examines an electronic board that shows Japan's Nikkei 225 index and New York Dow at a Tokyo securities firm on Monday, May 29th, 2023. Asian shares are mostly up after President Joe Biden, House Speaker Kevin McCarthy and reached an agreement to raise the U.S. debt ceiling.

Eugene Hoshiko/AP

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In the rain, people walk by an electronic board that shows Japan's Nikkei 225 at a Tokyo securities firm on Monday, May 29th, 2023. Asian shares are mostly up after President Joe Biden, House Speaker Kevin McCarthy and reached an agreement to raise the U.S. debt ceiling.

Eugene Hoshiko/AP

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In the rain, a person examines an electronic board that shows Japan's Nikkei 225 at a Tokyo securities firm on Monday, May 29th, 2023. Asian shares are mostly up after President Joe Biden, House Speaker Kevin McCarthy and reached an agreement to raise the U.S. debt ceiling.

Eugene Hoshiko/AP

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Asian shares are mostly up after President Joe Biden, House Speaker Kevin McCarthy and reached an agreement to raise the U.S. debt ceiling.

Tokyo, Sydney and Shanghai grew while Hong Kong declined. Seoul's markets were closed due to a holiday.

The agreement regarding the U.S. Debt eased a potential huge threat for markets around the world. Biden and McCarthy spent the weekend working to get enough support from Congress to pass the bill before the June 5 deadline, preventing a federal default.

"Markets have so far reacted cautiously." Clifford Bennett said, 'We are encouraged, but we remain cautious.

This agreement simply moves the issue into a potentially more politically-friendly time after the presidential election in two year's time. Bennett stated that nothing is certain and that a resolution could be more difficult than this time.

Tokyo's Nikkei index rose about 2% during early trading, but by midday was up 1.3% to 31,325. Sydney's S&P/ASX 200 index jumped 1%, to 7,228.60. Shanghai Composite index rose 0.2% to 3,218.26.

Hong Kong's Hang Seng fell 0.3% to 18,696.34.

The U.S. market will be closed on Monday for a holiday. Investors will have another busy week ahead of them, with data on consumer confidence and the employment situation.

The technology sector led Wall Street to solid gains on Friday after Marvell Technology soared by a record 32.4%. This was after the chipmaker stated that it expected AI revenue for fiscal 2024 will at least double compared to the previous year. This follows a report on Thursday from Nvidia. The chipmaker gave a large forecast for future sales related to AI.

The positive finish of the week for U.S. major indexes comes amid persistent anxiety about high inflation and generally weak corporate earnings.

The S&P closed at 4,205.45, up 1.3%. The Dow Jones Industrial Average rose 1% to 33 093.34. Nasdaq, a tech-heavy stock, soared 2.2% to 12,975.69. The index increased 2.5% in the past week, as investors focused on artificial intelligence.

The AI revolution has been a hot topic. Critics say that this is a bubble. But supporters believe it will be the next revolution in the global economy. Consumer Finance Protection Bureau (CFPB), the nation's financial watchdog said that it is working to ensure companies are following the law when using AI.

Wall Street, and the wider economy had already a long list of concerns prior to the U.S. defaulting its debt being highlighted.

In April, a key inflation measure closely monitored by the Federal Reserve showed a higher rate of inflation than expected.

The Fed's battle against high prices is complicated by the persistent pressure of inflation. Since 2022, the central bank has aggressively raised interest rates. However, it recently indicated that it would likely not raise rates when it meets at mid-June. The Fed's next moves are being influenced by the latest government report about inflation.

The latest inflation figures also showed that consumer spending has remained resilient, and along with a strong job market, it has been an important bulwark against a possible recession. The economy grew slowly at 1.3% per year from January to March, but is expected to accelerate to a pace of 2% in the current quarter April-June.

Corporate profits and expectations have been affected by inflation and fears of a possible recession. Profits for S&P 500 companies have decreased by about 2% in the latest round of earnings.

Ulta Beauty, a company that makes beauty products, fell 13.4% as it lowered its profit forecast. Big Lots, a discount retailer, fell 13.3% following a larger loss than analysts had expected for the last quarter.

Investors have rewarded companies with strong financial results. Gap's stock rose 12.4% following a first-quarter profit that was strong.

On Monday, U.S. crude oil benchmark gained 81 cents per barrel to $73.48 in electronic trading at the New York Mercantile Exchange. On Friday, it rose 84 cents per barrel to $72.67.

The dollar dropped to 140.44 Japanese Yaen from 140.59. The euro increased to $1.0734, up from $1.0724.