Last Updated 4:05 PM EST
Stock indices finished today’s trading session in the red as FOMC meeting minutes did little to boost investor optimism, and debt ceiling talks continue to stall. Indeed, the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) fell 0.5%, 0.73%, and 77%, respectively.
The real estate sector (XLRE) was the session’s laggard, as it fell 2.21%. Conversely, the energy sector (XLE) was the session’s leader, with a gain of 0.46%.
Furthermore, the U.S. 10-Year Treasury yield increased to 3.74%. The Two-Year Treasury yield also increased, as it hovers around 4.36%. This brings the spread between them to -62 basis points.
Compared to yesterday, the market is pricing in a higher chance of a higher Fed Funds rate for December 2023. In fact, the market’s expectations for a rate in the range of 4.5% to 4.75% decreased to 29% compared to yesterday’s expectations of 36%.
In addition, the market is now also assigning a 21% probability to a range of 5% to 5.25%. For reference, investors had assigned a 15% chance yesterday.
Last updated: 12:25PM EST
Stocks remain under pressure so far into today’s trading session. At the time of writing, the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are down 1%, 1%, and 0.9%, respectively.
This is despite Kevin McCarthy, the Speaker of the House, having expressed optimism about ongoing negotiations to prevent the United States from defaulting on its debt.
McCarthy indicated that Republican and Democratic representatives would convene at midday on Wednesday with the aim of reaching an agreement. He acknowledged the presence of significant differences between the two parties but remained hopeful about achieving a resolution.
As the U.S. Treasury is predicted to deplete its funds within a week, McCarthy maintained that a default would not occur. He emphasized that Republicans won’t support a “clean” bill to raise the debt ceiling without accompanying cuts to federal expenditure.
Interestingly, Charlie McElligott, a managing director at Nomura, noted that insiders in Washington, D.C., are anticipating an announcement about a debt ceiling deal over the weekend.
Last updated: 10:35AM EST
The Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are down 0.9%, 0.7%, and 0.6%, respectively, at 10:35 a.m. EST, May 24.
First published: 8:30 AM EST
U.S. Futures are in the red this morning as traders fret over the silence from the U.S. debt ceiling negotiations. Futures on the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are down 0.4%, 0.3%, and 0.25%, respectively, at 8:30 a.m. EST, May 24.
Despite continued discussions between the White House and Republicans, both parties have failed to reach a deal. Even if they do, some experts believe it will require the debt limit to be raised significantly, signaling more pain for the economy.
In the meantime, traders will keep an eye on the minutes of the FOMC meeting held in May. Any sign of a future rate hike decision will be accompanied by market volatility.
On the earnings front, chip maker Nvidia (NASDAQ:NVDA) will report Q1FY24 results after the bell. Recently, Nvidia’s CEO, Jen Hsun Huang, warned of the impact on chip sales from the ban on exports to China, as the mainland remains one of the biggest markets. Huang wants the Biden administration to be “thoughtful” about imposing more bans. NVDA stock has already gained 114% so far this year with the buzz surrounding AI-supportive chips. As per TipRanks’ analyst consensus, Nvidia’s average target price has a 3.5% downside potential from the current levels.
Elsewhere, European indices are trading in negative territory today, as markets eye the continued discussions on the U.S. debt ceiling in Washington. Importantly, the U.K.’s headline inflation for April fell to 8.7% year-over-year, from 10.1% in March. Even so, inflation in food remained elevated at 19.1%.
Asia-Pacific Markets End in the Red
Asia-Pacific indices also ended the trading session in the red today, following the prolonged negotiations on the U.S. debt limit.
Hong Kong’s Hang Seng, China’s Shanghai Composite, and Shenzhen Component indices ended the trading session down by 1.94%, 1.28%, and 0.84%, respectively.
At the same time, Japan’s Nikkei and Topix indices ended down by 0.89% and 0.42%, respectively.
Interested in more economic insights? Tune in to our LIVE webinar.
