On Wall Street’s worries that the Washington debt-ceiling battle won’t be resolved, US markets finished down on Tuesday.
S&P 500 (GSPC) value dropped 1.12% at session’s end. The Dow Jones Industrial Average (DJI) decreased by 200 points, or 0.69%. The heavily weighted Nasdaq Composite in technology (IXIC) fell more than 1.26%.
Tuesday saw a decrease in Treasury yields across the curve, with the benchmark 10-year yield edging lower to 3.7%. The yield on the 30-year bond edged down to 3.95%, while the yield on the two-year bond increased to 4.34%. The prolonged losses occurred as concerns about the debt-ceiling impasse grew as the likelihood of a default increased.
The negotiations on Tuesday gave rise to some initial optimism that a compromise may be achieved. President Biden and House Speaker Kevin McCarthy had made upbeat comments the day before.
But after declaring in the Oval Office that “I think, at the end of the day, we can find common ground,” McCarthy allegedly told Republican colleagues that “we are nowhere near a deal yet.”
As the “X-date” of June 1 approaches, when Treasury Secretary Janet Yellen stated a default is likely to occur, the back-and-forth has put markets on edge.
“Our base case remains that the debt ceiling ultimately does get lifted/suspended though the journey to that end could be at the eleventh hour and drive significantly higher market instability than appreciated by the market currently,” Dubravko Lakos, chief US equity strategist at JPMorgan, wrote in a note on Monday.
“We anticipate that a temporary/comprehensive deal on the debt ceiling will have a negative impact on federal spending and will likely lead to a contentious budget negotiation process later this year,” Lakos continued.
S&P Global’s flash US composite PMI, which measures activity in both the manufacturing and service sectors, registered 54.5 in May, up from 53.4 in April and higher than the 53.0 consensus expectation of economists, marking the index’s 13-month increase.
Separately, a data from the Census Bureau shows that sales of brand-new single-family homes increased by 4.1% in April to an annualised pace of 683,000, which was higher than the previously reported rate of 656,000. That’s higher than the 665,000 unit consensus estimate from Bloomberg for April and is still 11.8% above the same month last year.
According to an open letter to the Yelp board of directors on Tuesday, activist investor TCS Capital Management disclosed its investment in the company and requested that it investigate strategic alternatives, including a sale, as shares of Yelp Inc. (YELP) rose almost 5% in a single stock move.
Shares of Lowe’s Companies, Inc. (LOW) increased by more than 2% following the home improvement retailer’s Tuesday reduction of its full-year sales projection, citing decreased demand as a result of high inflation’s impact on discretionary spending. When it comes to using US-made chips, Apple (AAPL) said that it has signed a multi-billion dollar agreement with chipmaker Broadcom Inc. (AVGO). The tech giant’s stock fell by more than 1%.
While retaining its outlook for this year, Dick’s Sporting Goods (DKS) exceeded its first fiscal quarter sales and earnings, which caused shares to decline elsewhere.
After the maker of videoconferencing software Zoom Video Communications, Inc. (ZM) produced better-than-expected financial results for its fiscal first quarter, the company’s shares fell more than 7%. Additionally, the company updated its full-year guidance.
Pfizer Inc. (PFE) stock increased after a research revealed that individuals using the pharmaceutical company’s oral diabetic therapy saw successful weight loss.
Shares of BJ’s Wholesale Club Holdings, Inc. (BJ) fell more than 7% after the retailer revealed revenue that was lower than analysts had predicted. Comparable club sales excluding petrol fell short of expectations.
In the meanwhile, password sharing is being strictly prohibited in the US by Netflix (NFLX). The business announced the information Tuesday afternoon in a blog post.
Palo Alto Networks, Inc. (PANW), Intuit (NASDAQ:INTU), and