Tech lifts Nasdaq, gains as Treasury debt ceiling debate plays out.

SYDNEY, May 15 (Reuters) – U.S. stocks led the Nasdaq on Monday, struggling to catch up with tech stocks, and benchmark Treasury yields rose on optimism over a debt ceiling deal from Washington.

None of the three major U.S. stock indexes showed much confidence after a disappointing first-quarter earnings season and a lack of market-moving stimulus aside from a disappointing Empire State manufacturing report from the New York Federal Reserve.

But rising semiconductor stocks (.SOX) gave the tech-heavy Nasdaq a comfortable lead.

Outside of the partisan bickering on Capitol Hill, market participants had little to focus on as President Joe Biden and congressional Republicans stalled on a debt-limit deal.

“There seems to be some optimism about the debt ceiling talks,” said Joseph Sroka, chief investment officer at Nova Point in Atlanta. “Part of that may be the politeness of the political game, but it’s helping the market a little bit today.”

“You have a divided government and those are going to be more ‘standing’ negotiations,” Sroka added.

The Dow Jones Industrial Average (.DJI) fell 7.61 points, or 0.02%, to 33,293.01, the S&P 500 (.SPX) added 6.63 points, or 0.16%, to 4,130.71 and the Nasdaq Composite (.IXIC) added 3 points, or 0.54%, to 12,350.68.

European shares ended the session higher as investors eyed ongoing US debt ceiling negotiations and Turkey’s second round of elections.

The pan-European STOXX 600 index (.STOXX) rose 0.25% and MSCI’s benchmark of shares worldwide (.MIWD00000PUS) gained 0.33%.

Emerging market stocks rose 0.53 percent. MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was up 0.84%, while Japan’s Nikkei (.N225) added 0.81%.

Longer-dated U.S. Treasury yields rose as inflation eased even after Atlanta Fed President Rafael Bostick said he would vote to keep interest rates on hold if the Fed’s monetary policy meeting is held today.

Benchmark 10-year notes fell 11/32 to yield 3.5037% from 3.463% last Friday.

The 30-year note fell 35/32 to yield 3.8401% from 3.777% last Friday.

The greenback retreated against a basket of world currencies, touching a five-week high, consolidating gains amid a debt-limit scramble and weaker-than-expected factory data from the empire state.

The dollar index decreased by 0.25%, the euro increased by 0.24% to $ 1.0874.

The Japanese yen weakened 0.24% against the greenback at 136.07 per dollar, while sterling last traded at $1.2526, up 0.55% on the day.

Oil prices rose as fears of supply shortages worsened due to wildfires in Alberta, Canada, but gains were limited by weak demand.

U.S. crude rose 1.53 percent to trade at $71.11 a barrel, while Brent settled at $75.23 a barrel, up 1.43 percent on the day.

U.S. crude rose 1.53 percent to trade at $71.11 a barrel, while Brent settled last at $75.29, up 1.51 percent on the day.

Gold has rallied higher against a weakening dollar as the debt ceiling looms, and investors are clinging to hopes of a year-end interest rate cut despite comments from Fed officials.

Spot gold added 0.3% to $2,016.33 an ounce.

Reporting by Stella Qiu; Editing by Sonali Paul

Our Standards: The Thomson Reuters Trust Principles.