by Lewis Krauskopf, Shreyashi Sanyal and Shristi Achar A
(Reuters) – The New York Stock Exchange ended lower on Wednesday as talks between the White House and congressional leaders over raising the U.S. debt ceiling still stalled, raising the specter of a default of payment from the beginning of June.
The Dow Jones index fell 0.77%, or 255.59 points, to 32,799.92 points.
The broader S&P-500 lost 30.34 points, or 0.73%, to 4,115.24 points.
The Nasdaq Composite fell for its part by 76.08 points (0.61%) to 12,484.16 points.
While Democratic and Republican negotiators continued discussions on the US debt ceiling during the day, the decline of the main Wall Street indices was confirmed in the afternoon with the publication of the minutes of the last meeting. monetary policy of the Federal Reserve (Fed).
According to the Fed’s ‘minutes’, US central bank officials ‘broadly agreed’ at the May 2-3 meeting that the need for further interest rate hikes had become ‘less certain’ .
The Fed is expected to pause its aggressive interest rate hike campaign at its June 13-14 meeting. The hypothesis of a rate cut this year, considered by some market participants, has however been dismissed by recent comments from officials of the US central bank.
For now, investors are on edge as several rounds of talks between Democratic President Joe Biden’s administration and Republican leaders in Congress have failed to reach an agreement on raising the US debt ceiling.
According to the US Treasury Department, the federal government may no longer be able to make payments as of June 1, a situation that would be catastrophic for the US economy.
“Up until yesterday, investors were very optimistic” about the prospect of a US debt ceiling agreement, commented Angelo Kourkafas, strategist at Edward Jones. “But as we get closer (…) to June 1, we again see a certain caution”.
Ten of the eleven major sectors of the S&P-500 ended the session in the red, first and foremost real estate. Only energy ended up.
On the values side, among the movements to note, the 3.1% decline of Citigroup after the bank changed its mind about the sale of its Mexican unit Banamex for 7 billion dollars.
( Jean Terzian)
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