The Dow Jones Industrial Average, the S&P 500, and the Nasdaq all finished the day in the red as US markets declined on Tuesday. The current Congressional debate over lifting the debt limit, as well as worries about inflation and rising interest rates, continue to worry investors.
Any White House efforts to get a three-month extension are in risk as a result of House Speaker Kevin McCarthy’s promise to oppose a short-term agreement to extend the debt limit. McCarthy, a Republican from California, wants expenditure reductions as a condition of any agreement to lift the Federal debt level, while President Joe Biden is certain that he wants to raise the debt ceiling without any reductions. If legislators are unable to find a solution, the US may default on its debt.
John Williams, the president of the New York Federal Reserve, issued a warning that if inflation does not decline, interest rates may rise. He said that it would take time for the Federal Reserve’s measures to bring about economic balance to fully manifest. The yield curve became further inverted as the yield on the 10-year Treasury increased by one basis point to 3.53% and the yield on the two-year Treasury increased by three basis points to 4.04%.
In terms of specific equities, PayPal fell after its quarterly report while Palantir rose as CEO Alex Carp bragged about its AI product. Dish Network faltered as it dropped 11.1%, prolonging a protracted slump, but MongoDB was able to get over a buy price. After agreeing to pay $215 million to resolve a gender discrimination claim, Goldman Sachs closed the session with a 0.5% loss.
Despite doing better than the other major indices, the Dow Jones index ended the day down 57 points, or 0.2%. Boeing increased 2.3%, but Intel today on the Dow Jones fell 2.2%, below most of its rivals.
The Nasdaq finished the session down by 0.6%, behind the other major indices. Lucid, an EV stock, fell 5.6%. Only the energy, industrial, and consumer discretionary sectors finished in the black, causing the benchmark S&P 500 to decline by 0.5%. The weakest performances were materials and technology. Late losses by small caps were curbed, and the Russell 2000 ended the day down 0.2%. However, growth companies had a strong showing, and the Innovator IBD 50 ETF nominally closed in the green.