US stocks rally, with the Dow climbing 337 points on debt ceiling optimism

• US stocks ended higher Thursday as investors cheered an agreement for a short-term increase to the debt ceiling.
• The yield on the benchmark 10-year Treasury note rose to 1.575% Thursday.
• Bitcoin and oil traded higher.

US stocks rallied on Thursday as investors cheered the announcement that legislators have agreed to raise the federal borrowing limit until December, averting a potentially destructive default on the country's debt.

The benchmark S&P 500 edged higher while the tech-heavy Nasdaq also ticked up. The Dow Jones Industrial Average jumped more than 300 points.

Here's where US indexes stood at the 4:00 p.m. ET close on Thursday:

• S&P 500: 4,399.76, up 0.83%
• Dow Jones Industrial Average: 34,754.94, up 0.98% (337.95 points)
• Nasdaq Composite: 14,654.02, up 1.05%

"The outlook for 2022 remains optimistic given markets are still expecting Democrats to ultimately deliver infrastructure spending and President Biden's economic plan by December," Edward Moya, senior equity analyst at foreign exchange firm Oanda, said in a note.

He noted that Republican Senator Mitch McConnell's chess move was "brilliant" as it puts all the pressure back on the Democrats. This, Moya added, increases the likelihood that Democrats run out of time to deliver more spending and tax increases.

Investors are also trying to anticipate when the Federal Reserve will begin tapering asset purchases amid inflationary pressures.

"We believe that inflation will continue to build up over the coming months, peaking close to 5% core CPI early next year before moving lower - an environment that resembles reflation more than stagflation," Gargi Chaudhuri, head of iShares investment strategy, said in a note Thursday.

The yield on the benchmark 10-year Treasury note rose to 1.575% Thursday from 1.524% Wednesday. Yields and prices move inversely.

US jobless claims totaled 326,000 last week, the Labor Department announced Thursday, coming in below the median forecast of 348,000 from economists surveyed by Bloomberg. It also snapped a three-week streak of gains.

In cryptocurrencies, bitcoin was trading 1.55% lower to $54,121 after breaching $55,000 on Wednesday. Bitcoin's near 35% rally over the past week comes as investors reassess its appeal as an inflation hedge, JPMorgan said in a note.

Dogecoin spin-off shiba inu continued its monster rally, having risen by over 300% in a week to a $12 billion valuation, according to Coinmarketcap. It has gained around 350% in a month, roughly what bitcoin has gained in a year.

The US Securities and Exchange Commission has recently approved Volt Equity's ETF, which aims to track companies that hold a majority of their net assets in bitcoin or derive a majority of their profit or revenue from bitcoin-related activities.

Oil rallied after the US said it may not release emergency crude reserves to combat rising gas prices, Reuters reported.

West Texas Intermediate crude oil rose as much as 1.38%, to $7.50 per barrel. Brent crude, oil's international benchmark, climbed 1.32%, to $82.15 per barrel.

Gold edged lower by 0.47%, to $1,755.89 per ounce.