US Stock Markets React to Political Dispute over Debt Ceiling Increase

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NEW YORK (awp international) – U.S. stock markets moved in different directions in early trade on Monday. While the best-known Wall Street index, the Dow Jones Industrial, fell slightly, the technology-heavy Nasdaq stock exchanges went up.

Investors continue to focus on the political dispute over raising the debt ceiling in the USA. An agreement is still not in sight. President Joe Biden wants to discuss a budget agreement with House Speaker Kevin McCarthy in a few hours to avert a default. Further talks are likely to follow, because the threat of default at the beginning of June could not only damage the world’s largest economy, but also trigger a global financial crisis and an economic downturn.

The Dow fell 0.36 percent to 33,305.66 points in early trading. The market-wide S&P 500 showed little change, down 0.02 percent to 4191.06 points, after this much-noticed index had temporarily climbed to its highest level since last summer on Friday.

The tech-heavy Nasdaq 100 rose 0.33 percent to 13,849.30 points on Monday. The fact that US Federal Reserve Chairman Jerome Powell once again fueled hopes that the Fed might not be able to raise interest rates further in June should have a supportive effect. Citing the recent turmoil in the banking sector, Powell had said interest rates “may not need to rise as much as they would otherwise to meet our targets.”

Among the individual stocks on the Nasdaq, Micron’s shares, which brought up the rear in the selection index, lost 4.3 percent. China has reminded that the trade conflict with the USA could escalate again at any moment, wrote CMC market analyst Konstantin Oldenburger, pointing out that Micron products had not withstood a cyber security check by the Chinese authorities. Chinese companies have therefore been warned against buying these products. “The technology sector has long since become the central playing field for national security between the two largest economies,” says Oldenburger.

In the Dow, shares in the largest US bank JPMorgan rose by 0.4 percent. During an investor day, management expressed a little more confidence for the current year in view of the takeover of the collapsed First Republic Bank. In contrast, the S&P 100 saw Ford shares fall 1.1 percent. The carmaker confirmed its annual targets during its capital market day.

Meta gained 2.6 percent and reached its highest level since February 2022. Nevertheless, the internet giant felt the hard hand of European data protection rules more than before. Facebook’s parent company has been fined a record €1.2 billion by Ireland’s DPC over Facebook’s involvement in mass surveillance by Anglo-American intelligence agencies./ck/men