NEW YORK (Reuters) – Stocks ended sharply lower and bond yields closed higher on Tuesday in New York as U.S. debt ceiling talks continue to slide in Washington.
The Dow Jones index lost 0.69% to 33,055.51 points, the S&P 500 lost 1.12% to 4,145.58 points and the Nasdaq Composite dropped 1.26% to 12,560.25 points.
Congressional Republicans and representatives of Joe Biden’s administration completed a new round of talks during the day with no notable progress.
The deadline for raising the government’s borrowing capacity is set for early June.
Concern over this issue continued to drive up Treasury yields.
Michael Wilson, equity strategist for Morgan Stanley, notes that even if reached, a debt deal could still have negative implications for economic activity.
“If they reach an agreement on the debt ceiling, there will be concessions on budget spending. This is a problem for growth,” he said. “Will there be an immediate impact, or later? A bit of both, no doubt. At the end of the day, there is no positive compromise.”
Added to this is the caution of investors before the minutes of the meeting of the monetary policy committee of the Federal Reserve of May 2 and 3, expected Wednesday, with potential clues about the intentions of the US central bank.
On the stock side, semiconductor maker Broadcom gained ground after announcing a multi-billion dollar deal with Apple to use US-produced chips.
(Saeed Azhar, Shreyashi Sanyal, written by Jean-Stéphane Brosse)
Copyright © 2023 Thomson Reuters
I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
