NEW YORK (dpa-AFX) – The ongoing stalemate in the US debt dispute had a noticeable impact on Wall Street on Tuesday. In a few days, the government is at risk of defaulting unless it agrees with Republicans in Congress to raise the debt ceiling. Treasury Secretary Janet Yellen warned a default could occur as early as June 1st. In their estimation, this would result in a collapse on the financial markets and a massive recession.
The leading index Dow Jones Industrial lost 1.01 percent to 33,012.14 points. The market-wide S&P 500 fell 0.64 percent to 4109.90 points. The technology-heavy Nasdaq 100 saved an increase of 0.09 percent to 13,426.01 points.
Shortly before leaving for the G7 summit in Japan, US President Joe Biden met again with senior Republicans and Democrats in the White House over the unresolved dispute. “The tonality of US politics in the current dispute over the debt ceiling is becoming more acute,” said market expert Andreas Lipkow. This is causing uncertainty on the US stock exchanges.
Among the Dow’s biggest losers, shares of Home Depot fell 2.2 percent. The hardware store chain lowered its full-year targets after sales fell more than expected in the first quarter. Apparently, economic uncertainty had caused home improvement spending to fall.
Horizon Therapeutics shares fell 14.2 percent. The US competition and consumer protection agency FTC had filed a lawsuit to block the purchase of Horizon by the biopharmaceutical company Amgen. Amgen shares fell 2.4 percent.
Capital One stocks rose 2.1 percent, making them among the best stocks in the S&P 500. It had previously been announced that star investor Warren Buffett’s investment company Berkshire Hathaway had joined the financial services provider.
At the top of the index, the shares of the chip manufacturer AMD rose by 4.2 percent. The PC market is still correcting itself from the special Corona boom, wrote the expert Stacy Rasgon from the analysis company Bernstein Research. The decline is now “less bad”, and there are signs of a certain stabilization at the pre-corona level. A normalization in the third or fourth quarter seems plausible.
The euro was last listed at 1.0861 US dollars. The European Central Bank had previously set the reference rate at 1.0881 (Monday: 1.0876) dollars. The dollar thus cost 0.9190 (0.9195) euros.
On the US bond market, the futures contract for ten-year bonds (T-Note Future) recently fell by 0.26 percent to 114.94 points. In return, the yield on ten-year paper rose to 3.55 percent. On balance, retail sales in April proved to be a drag on the bond market. While these rose less than expected, the revenues of the so-called control group increased more significantly than expected. The latter variable is included in the estimate for economic growth. Retail is particularly important for economic development in the USA. If the industry picks up too much, the risk of inflation increases, and the US Federal Reserve may have to counteract this with rate hikes./la/ngu
— By Lutz Alexander, dpa-AFX —
2023-05-16 20:35:18
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