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Debt ceiling vote, June Fed meeting, Nasdaq rally: Top stories

Yahoo Finance Live's Julie Hyman breaks down the biggest stories of the day including the debt ceiling deal coming up for a vote, what this week's economic data may tell us about what the Fed may do at its next meeting, and the Nasdaq's big May rally.

Video transcript

JULIE HYMAN: Here are three things you need to know this morning. Heading to the House, the debt limit deal struck by President Biden and House Speaker Kevin McCarthy is poised for a vote today after clearing a critical procedural hurdle. Conservative critics of the plan were expected to put up a fight against the bipartisan bill, which freezes the US borrowing limit until 2025.

The so-called X Date is fast approaching. Treasury Secretary Janet Yellen says the US will not be able to pay its bills after June 5. Treasuries have been rallying on the recent developments with yields dropping from the 3.8% level that we saw last week.

Traction on the debt ceiling means the data dependent Fed takes center stage once again. And there is some key data to consider ahead of the June 14 meeting-- job openings today, non-farm payrolls, CPI, they all come out before the FOMC's decision.

And the markets are now firmly pricing in a hike. Cleveland's Loretta Mester doesn't disagree. Speaking with the Financial Times, she sees quote, "no compelling reason to pause interest rate increases." The Richmond Fed's Thomas Barkin also weighing in, saying that to take the sting out of inflation, he needs to see signs that demand is coming down.

And a big month for stocks closes out with AI focused companies very much in the driver's seat. The NASDAQ's rally was the story of May with five straight weekly gains for that index. The ascent higher was driven by the likes of the video, of course, which yesterday became the latest member of the trillion club and the only one in the semiconductor industry.

But can the push higher last? Citigroup strategists aren't so sure. They say positions are very much biased towards profit taking, which they say could be a headwind for the rally.