Dow surges 400 points as Biden and lawmakers inch closer to a debt ceiling deal

• US stocks jumped Wednesday as lawmakers made progress on debt ceiling negotiations.
• President Biden and members of Congress are getting closer on a deal after weeks of deadlock.

US stocks jumped on Wednesday as investors grew optimistic that a deal over the debt ceiling could soon be in sight.

Major indexes climbed steadily during the session, with markets cheering hopeful remarks from President Joe Biden and House Speaker Kevin McCarthy, who both stated they do not believe the US will default on its debt.

"I'm confident we'll get the agreement on the budget, that America will not default on its debt," Biden said on Wednesday morning.

While an actual default was widely thought to be unlikely, the possibility of such a scenario has weighed on markets in recent weeks. Top executives have loudly warned of a catastrophe striking the financial system should the government default.

Top economist Mohamed El-Erian tweeted on Tuesday that deadlock in Washington is harming the country's credibility at a time when the US should be re-establishing its role on the world stage.

Here's where US indexes stood as the market closed at 4 p.m. on Wednesday:

• S&P 500: 4,158.77, up 1.19%

• Dow Jones Industrial Average: 33,420.77, up 1.24% (408.63 points)

• Nasdaq Composite: 12,500.57, up 1.28%

Here's what else is happening:

• The federal government's bank account saw a steep drop as the debt ceiling deadline looms. The Treasury General Account stood at $87.4 billion on Monday, down from $140 billion on Friday.
• Investors have pulled $8 billion from small-caps since March. Jefferies said that the segment of the stock market has been battered by recession fears and debt ceiling drama.
• Google parent Alphabet reclaimed the $1.5 trillion market cap level for the first time in a year on the back of its efforts in the buzzy AI space.
• SPAC King and venture capital investor Chamath Palihapitiya said the dollar won't be at risk because no other country actually wants to hold their own currency. He hit back at fears of de-dollarization.

In commodities, bonds, and crypto:

• Oil prices jumped. West Texas Intermediate crude rose 2.57% to $72.68 per barrel. Brent, the international benchmark, was up 2.58% to $76.81.
• Gold fell 0.3% to $1986.40 per ounce.
• The 10-year Treasury yield was up two basis points to 3.57%.
• Bitcoin rose 1.5% to $27,388.