debt ceiling

US equities surged on hopes of a debt ceiling deal, with Dow Jones up 329 points and S&P 500 rising 1.3%. Nasdaq Composite jumped 2.2%, driven by Marvell's 32% spike after strong revenue projections due to AI technologies, in line with Nvidia on Thursday. Treasury Secretary Yellen announced the department expects to be able to make payments on US debts up until June 5, buying time for debt ceiling talks. It comes after White House and Republican negotiators appeared to be closing in on a compromise agreement to raise the debt ceiling for two years but were still clashing Friday. The positive mood persisted despite hotter-than-expected PCE inflation data, reinforcing bets the Federal Reserve will maintain its hawkish stance and keep interest rates elevated for an extended period. On the corporate front, retailer GAP soared 12% after the company's earnings beat on the upside. For the week, the Dow lost 1% while the S&P went up 0.3% and the Nasdaq notched its fifth straight week of wins.

The ruble-based MOEX Russia index advanced more than 2% on the week to 2682, the highest since April 2022 driven mainly by dividend news. Companies such as Lukoil (+1.6%), Inter RAO (+1.1%), and PhosAgro (+0.9%) saw their stock prices rise after shareholders approved dividend payments. Additionally, Sberbank's shares continued to rise, closing the dividend gap and reaching a yearly high. On the other hand, Gazprom Neft's board of directors recommended dividend payments that were lower than market expectations and sank sharply before recovering at the end of the week. Support for the Russian market also came from strong oil prices after the Saudi Arabian Energy Minister recommended caution to oil speculators betting on a decline.

European shares staged a recovery at the end of a volatile week, bouncing back from multi-week lows on Friday. Germany's DAX 40 index surged by 1.2%, reaching 15,984 points, while the pan-European STOXX 600 also climbed by the same margin, reaching 461 points. Investors remained cautious but gained some confidence as negotiations in Washington indicated progress towards reaching a deal on lifting the US debt ceiling. Reports suggested that the two sides were only $70 billion apart, keeping market participants on edge. In terms of corporate news, German media group ProSiebenSat.1 confirmed its full-year outlook, while Rio Tinto's stock received an upgrade from "equal weight" to "overweight" by Morgan Stanley. Additionally, French supermarket company Casino resumed trading after a temporary suspension earlier in the week. The company officially announced the start of court-backed negotiations with its creditors.

The Nikkei 225 Index rose 0.37% to close at 30,916 on Friday, climbing back toward its highest levels in over three decades, as Japanese technology stocks tracked their US peers higher after Nvidia’s earnings report boosted the outlook for semiconductor and AI-related companies. Investors also digested data showing the core inflation rate in Japan’s capital, Tokyo, slowed more than expected in May but remained well above the central bank’s target. Gains in the technology sector were led by Tokyo Electron (4.4%), Advantest (3.9%), Renesas Electronics (2.5%), IBIDEN (3.1%) and SUMCO (2.9%). Other index heavyweights also advanced, including Sony Group (0.7%), SoftBank Group (1.1%), Mitsubishi Corp (1.5%), Oriental Land (3%) and Hoya Corp (3.4%).

The benchmark S&P BSE Sensex surged 1% to 62,502 points on Friday, and the blue-chip Nifty 50 also rose by the same margin, settling at 18,499 points, with both indexes hitting their highest levels since December 2022. Additionally, the Sensex and Nifty have also recorded weekly gains of over 1%. The IT sector experienced a boost as a result of the tech-heavy Nasdaq's sharp overnight rise, fueled by impressive earnings from a leading chip-maker Nvidia. Among individual stocks, Reliance Industries jumped nearly 3% after global brokerage Bernstein estimated that its units Reliance Retail and Reliance Jio would dominate the long-term e-commerce marketplace in India, which is valued at over $150 billion. Finally, the ongoing progress in the US debt ceiling talks ahead of the June 1 deadline contributed to a positive sentiment across global markets.

The Shanghai Composite rose 0.35% to close at 3,213 while the Shenzhen Component gained 0.12% to 10,910 on Friday, but mainland stocks still finished the week sharply lower following a selloff that brought the benchmark indexes to their lowest levels in about five months. Chinese markets were weighed down by weak global sentiment as geopolitical risks resurfaced and as investors cautiously awaited updates on the debt ceiling negotiations in Washington. Chinese technology stocks led the advance on Friday, tracking their US peers higher after Nvidia’s earnings report boosted the outlook for semiconductor and AI-related companies. Gains in the sector were led by Dawning Information (6.2%), Kunlun Tech (2.6%) and Inspur Electronic (3.7%). Meanwhile, new energy firms underperformed the market, with notable losses from Longi Green Energy (-2.9%), BYD Company (-3.4%) and Contemporary Amperex (-1.8%).

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