Stock Market Today: Debt Ceiling News Drives Major Stock Rally
The major indexes soared after President Biden and House Speaker McCarthy both struck an optimistic tone on recent debt limit talks.


It was a slow start to the trading session Thursday as Wall Street mulled over another round of retail earnings. However, reports that debt ceiling negotiations are progressing lit a fire under stocks, with all major indexes rallying hard into the close.
Target (TGT, +2.6%) was the latest major retailer to disclose its first-quarter results. The company said earnings were down 6.2% year-over-year to $2.05 per share, while revenue edged up 0.6% to $25.3 billion. The company also forecast lower-than-expected Q2 earnings and said it expects same-store sales to be down in the low-single digit percentage range vs analysts' estimates for a slight increase.
However, the relatively strong Q1 results kept full-year guidance intact, says David Wagner, portfolio manager at Aptus Capital Advisors, an Alabama-based registered investment advisor with $4.25 billion in assets under management.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"Consumables items continue to outperform lagging discretionary category sales," Wagner notes. "Lapping last year's freight, markdown and inventory issues ahead creates easy comparisons near term, but we acknowledge that an underwhelming Q2 guide is likely to make the year more weighted toward the second half."
Off-price department store operator TJX (TJX, +0.9%) was another retailer that unveiled its first-quarter results today. The company said earnings jumped 55% year-over-year to 76 cents per share, while revenue was up 3.3% to $11.8 billion. Same-store sales rose 3%.
"Some of the commentary [from Target and TJX] was similar to what we heard yesterday [from Home Depot (HD)] as there was some weakness in housing related big-ticket discretionary purchases due in part to some normalization in that category," says Michael Reinking, senior market strategist at the New York Stock Exchange. "Demand in staples categories was stronger. While the results are not perfect they also don't suggest that consumer spending is falling off a cliff. The focus shifts to Walmart (WMT) tomorrow."
Debt ceiling progress
While retail earnings were certainly a main discussion point early on in the session, focus quickly shifted to the debt ceiling. Following a Tuesday meeting with President Joe Biden, House Speaker Kevin McCarthy told reporters that he believes a deal is "possible" by the end of this week. Biden shared in the optimism, saying that "there's no alternative" but to do "the right thing for the country."
Those developments were well-received by the market. At the close, the Dow Jones Industrial Average was up 1.2% at 33,420, the S&P 500 was 1.2% higher at 4,158, and the Nasdaq Composite had gained 1.3% to 12,500.
Hedge funds' favorite blue chip stocks
"What's the smart money doing?" It's a question we try to answer each quarter following the required disclosure of asset managers' stock holdings. We do this not to duplicate the actions taken by hedge funds, other institutional investors and billionaires, but rather as a learning exercise – to observe what those with access to research and information typically not available to the average investor are doing with their capital.
Looking at the stocks Warren Buffett is buying and selling shows that the famed investor dropped more equities from the Berkshire Hathaway equity portfolio than he added during the first three months of 2023.
As for hedge funds, they remained heavily invested in blue chip stocks in the first quarter. However, they were also net sellers of Apple (AAPL) and Microsoft (MSFT) during a period in which they arguably should have been buying those Dow stocks instead of unloading them.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at a local investment research firm. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.
-
I'm 65, with $1.2 million saved and a paid-off $1.3 million rental property. Should I sell, or keep it for income?
Should I be a landlord in retirement?
-
Do You Really Need That Wine Cellar?
Home Features Wine cellars are a popular feature in high-end houses. Will installing one in your home increase its value, or would you be better off with a cheaper solution?
-
My Three-Day Rule for Investing: And If it Applies Now
Stock Market I've seen a lot in my career. Here's what I see now in the stock market.
-
Is It Time to Invest in Europe?
Stock Market Europe is being shaken out of its lethargy, militarily and otherwise, by Donald Trump's changes in U.S. policy. Should investors start buying?
-
Stock Market Today: Dow Gains 1,160 Points on U.S.-China Trade Deal
The two countries agreed to a 90-day truce that will give them time to work on more substantive trade negotiations.
-
Stock Market Today: Investors Weigh Weekend Negotiations
Investors, traders and speculators will look to Switzerland for answers about the most compelling issue confronting global markets.
-
Stock Market Today: S&P 500 Nabs Longest Win Streak Since 2004
The stock market's rebound from its mid-April tariff-induced lows has been nothing short of impressive.
-
Stock Market Today: Dow, S&P 500 Extend Win Streaks to 8
Strong earnings results for Magnificent 7 stocks Microsoft and Meta fueled upside in the equities market.
-
How Can Investors Profit From AI's Energy Use?
Global energy demand is expected to grow by leaps and bounds over the next several years as AI usage accelerates. Here's how to get a piece of the pie.
-
Stock Market Today: Dow Drops 971 Points as Powell Pressure Ramps Up
President Trump is increasing his attacks against Jerome Powell, insisting the Fed chair cut interest rates.