Major US indexes plummet amid debt ceiling deadlock | InterPrac

Major US indexes plummet amid debt ceiling deadlock

Major US indexes plummet amid debt ceiling deadlock

 

The Dow Jones Industrial Average fell for a fourth straight day as US lawmakers struggled to reach a deal on the country’s debt ceiling, heightening worries of a potential default.

House Speaker Kevin McCarthy said in a late-morning press conference that negotiators remain at odds on spending caps, and blamed the Democrats for coming to the table so late in the process. McCarthy also said that he believes the negotiating teams could make progress Wednesday.

Treasury Secretary Janet Yellen previously warned lawmakers that a potential default in early June is “highly likely.” She noted Wednesday that she already sees “some stress in financial markets” as concerns mount that the US could see its first default in history.

The market remains in “pullback mode” due to a combination of overbought conditions and elevated fears of an unfavourable debt ceiling outcome as June 1 draws closer, said Adam Sarhan, CEO of 50 Park Investments.

The Dow dropped 255.59 points, or 0.77 per cent, to close at 32,799.92. The S&P 500 lost 0.73 per cent to end at 4,115.24, while the Nasdaq Composite edged 0.61 per cent lower to settle at 12,484.16.

The Federal Reserve’s latest meeting has signaled more “uncertainty” as to whether the central bank should hike again in June. The minutes indicated that a decision to increase rates at the next meeting would ultimately hinge on upcoming data releases.

Citigroup shares fell 3 per cent as the bank announced plans to spin off its Mexico business Banamex through an IPO after failing to find a buyer.

Moderna's shares dropped over 4 per cent despite recent gains due to news of the XBB variant wave of Covid cases in China. Beijing officials estimate 65 million new weekly cases by June-end.

The tail-end of earnings season stretched on with Kohl’s and Abercrombie & Fitch popping 7.5 per cent and 31.1 per cent, respectively, after posting surprise profits.

Nvidia posted their results after the bell. The chipmaker reported beats on the top and bottom lines in its fiscal first quarter. The stock surged 19 per cent in extended trading and has already more than doubled this year.

In commodity news, AMG Lithium and Fortum have entered into an agreement where Fortum will provide recovered lithium from its hydrometallurgical plant to AMG Lithium for further processing.

Overall, all US sectors except for Energy finished lower overnight, with Real Estate falling the most.

Futures

The SPI futures are pointing to a 0.4 per cent fall

Currency

One Australian dollar at 7:10 AM is buying 65.44 US cents.

Commodities

Iron ore futures are pointing to a 1.8 per cent fall.

Gold lost 0.75 per cent. Silver fell 1.88 per cent. Copper dropped 2.44 per cent and oil gained 1.80 per cent.

Figures around the globe

Across the Atlantic, European markets closed lower. London’s FTSE fell 1.75 per cent, Frankfurt lost 1.92 per cent while Paris closed 1.70 per cent lower.

In Asian markets, Tokyo’s Nikkei lost 0.89 per cent, Hong Kong’s Hang Seng fell 1.62 per cent while China’s Shanghai Composite closed 1.28 per cent lower.

Yesterday, the Australian sharemarket closed 0.63 per cent lower at 7214.

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

Disclaimer

The views, opinions or recommendations of the commentators in this presentation are solely those of the author and do not in any way reflect the views, opinions, recommendations, of Sequoia Financial Group Limited ABN 90 091 744 884 and its related bodies corporate (“SEQ”). SEQ makes no representation or warranty with respect to the accuracy, completeness or currency of the content. Any prices published are accurate subject to the time of filming and shouldn’t be relied upon to make a financial decision. Commentators may hold positions in stocks mentioned and companies may pay FNN to produce the content at times. The content is for educational purposes only and does not constitute financial advice. Independent advice should be obtained from an Australian Financial Services Licensee before making investment decisions. To the extent permitted by law, SEQ excludes all liability for any loss or damage arising in any way including by way of negligence.
Copyright 2023 – Finance News Network


Source: Finance News Network

Comments are closed.