Wall Street Ended Sharply Lower on US Debt Ceiling Jitters

Picture Source: Internet

Wall Street stocks finished sharply lower on Tuesday as investor jitters grew over a lack of progress in US debt limit talks. Representatives of President Biden and Republicans ended another round of debt ceiling talks without a conclusion, with less than two weeks left until the government is due to default.

Investors are also waiting for minutes from the Federal Reserve’s May 2-3 meeting, due on Wednesday, to assess the central bank’s next likely move on interest rates.

The major indices in the US fell overnight, with the Dow Jones Industrial Average ending 0.69% lower, the S&P 500 losing 1.12%, and the Nasdaq Composite dropping the most by 1.26%. Volume on US exchanges was relatively light compared to the previous 20 sessions.

Among individual stocks, Broadcom Inc. advanced 1.2% after entering a multi-billion-dollar deal with Apple Inc to use chips made in the United States, while Apple shares fell 1.5%.

Zoom Video Communications dropped over 8% after reporting its slowest quarterly revenue growth. Lowe’s Companies Inc cut its annual comparable sales forecast, and BJ’s Wholesale Club shares plunged 7.1% after missing revenue expectations.

Shares of regional bank PacWest Bancorp extended gains after announcing the sale of $2.6 billion of its real estate loan portfolio. Declining stocks outnumbered rising ones within the S&P 500 by a wide margin. The S&P 500 posted three new highs and one new low, while the Nasdaq recorded 90 new highs and 70 new lows.

Investors have been demanding higher premiums to hold US debt, especially those at the highest risk of default, as politicians struggle to find an agreement. Yields on securities maturing in June topped 6%, while bills maturing in May yielded about 2%.

Brent crude futures rose 1.1% to $77.70 per barrel, while US West Texas Intermediate crude (WTI) gained 1.2% to $73.79 per barrel.

Get Daily Prediction & Stocks Tips On Your Mobile