Stock Market Today: Stocks Rally on Debt Ceiling News, Manufacturing Data
A slow start turned into a strong finish for stocks thanks to encouraging debt ceiling updates and the latest economic data.


Stocks started the day in negative territory in response to a red-hot reading on the labor market.
The major indexes rallied into the close, however, helped by a batch of bad-news-is-good-news manufacturing data and signs the debt ceiling deal could make it across the finish line ahead of the June 5 default date.
Ahead of the opening bell, data from ADP showed the U.S. added 278,000 private jobs in May vs economists' estimates for a gain of 180,000. Today's report comes ahead of tomorrow's nonfarm payrolls data that is expected to show an increase of 188,000 new jobs last month.
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Manufacturing data comes in soft
Also on the economic front, data from both S&P Global and the Institute for Supply Management (ISM) showed manufacturing activity weakened in May.
"If the Federal Reserve is looking for an excuse to not hike key interest rates in June, the ISM manufacturing report should be cited as the reason, since only four of the 18 industries ISM surveyed reported an expansion," says Louis Navellier, chairman and founder of Navellier & Associates. May marked the seventh straight month the ISM manufacturing index came in below 50, a level which signals contraction.
At last check, Fed funds futures were pricing in a 76% probability of a pause at the next Fed meeting, scheduled for later this month.
Also boosting investor sentiment were hopeful debt ceiling headlines. The House of Representatives last night passed the Fiscal Responsibility Act that will suspend the debt ceiling through January 2025. The bill now heads to the Senate with some saying a vote could come as early as today.
Revenue guidance weighs on C3.ai stock
In single-stock news, C3.ai (AI) plunged 13.2% after the artificial intelligence software startup reported earnings. While AI reported a narrower-than-expected fiscal fourth-quarter loss on higher-than-anticipated revenue, it gave a soft revenue guidance for its current fiscal year. Still, Wedbush analyst Daniel Ives upgraded C3.ai to Outperform from Neutral – the equivalents of Buy and Hold, respectively – saying the company "has turned a corner and is ready to now capitalize on the $800 billion AI transformational opportunity over the next decade."
Today's decline for C3.ai shares didn't seem to faze other AI stocks, with artificial intelligence players like Nvidia (NVDA, +5.1%) and Snowflake (SNOW, +1.2%) ending higher on the day.
As for the major indexes, the Nasdaq Composite climbed 1.3% to 13,100, the S&P 500 rose 1.0% to 4,221, and the Dow Jones Industrial Average rose 0.5% to 33,061.
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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.
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