Stock market today: Global equities largely up after House passes debt ceiling

TOKYO (AP) Global benchmarks were mostly higher Thursday after the United States House of Representatives passed a debt ceiling and austerity packageprevent a default crisis.

The French CAC 40 gained 0.9% in early trading to 7,163.56, while the German DAX rose 1.1% to 15,833.44. The UK FTSE 100 rose 0.7% to 7,495.59. US equities would float higher, with Dow futures up nearly 0.1% to 32,994.00. S&P 500 futures rose 0.2% to 4,197.00. Oil prices rose.

Investor enthusiasm was tempered by concerns about the Chinese economy following disappointing recent data on a recovery in the world’s second-largest economy and a key driver of regional growth.

Following recent disappointing economic data out of China, leveraged real economy stocks are likely to underperform. If economic data from China continues to fall short of expectations, more participants could start predicting lower China’s GDP for the coming quarters, said ActivTrades’ Anderson Alves.

The Japanese benchmark Nikkei 225 rose 0.8% to close at 31,148.01. The Australian S&P/ASX 200 gained 0.3% to 7,110.80. South Korea’s Kospi quickly shed early gains, falling 0.3% to 2,569.17. The Hong Kong Hang Seng fell 0.1% to 18,216.91, while the Shanghai Composite showed little change at 3,204.63.

If the debt deal also gets into the Senate, government checks will continue and it would prevent financial turmoil at home and abroad before Monday’s deadline when the Treasury said the US would run out of money to pay its debts.

Wall Street stocks reversed their losses in the afternoon after a Federal Reserve official hinted that the central bank could hold rates steady at its next meeting in two weeks.

Concerns have increased about an economic slowdown under the weight of much higher interest rates. The Federal Reserve has been raising interest rates at a breakneck pace since early 2022 in hopes of bringing inflation under control. But high rates work by hurting the economy and depressing prices for investments.

We see this as a race to weakness between inflation and economic activity, said Tony Roth, chief investment officer at Wilmington Trust.

Either inflation needs to come down to get back to the Fed’s target, which would make it easier to cut interest rates, or the economy will go into recession. Roth said that both the economy and inflation have stayed strong for longer than he expected: it’s a very slow race to the bottom.

In the bond market, the yield on the 10-year government bond fell from 3.70% at the end of Tuesday to 3.62%. It helps set rates for mortgages and other major loans that affect the housing and other markets.

The two-year rate, which moves more based on expectations for Fed action, fell from 4.46% to 4.39%.

In energy trading, benchmark US crude rose 12 cents to $68.21 a barrel. Brent crude, the international standard, gained 18 cents to $72.78 a barrel.

In currency trading, the US dollar rose from 139.29 yen to 139.89 Japanese yen. The euro fell from $1.0692 to $1.0683.

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AP Business Writer Stan Choe contributed from New York.

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Yuri Kageyama is on Twitter https://twitter.com/yurikageyama