The mood threatens to change
US stock markets collapse over debt dispute
05/23/2023, 11:09 p.m
The unresolved dispute over raising the US debt ceiling is causing increasing concern on Wall Street. After a day of meager sales, the stock exchanges close in the red. Papers from the US regional banks are still in demand.
Worries about the US debt ceiling negotiations pushed Wall Street into the red on Tuesday. The Dow Jones Index the standard values closed 0.7 percent lower at 33,055 points. The broader one S&P 500 dropped 1.1 percent to 4145 points. The index of the technology exchange Nasdaq lost 1.2 percent to 12,560 points. Retail sales remained below average.
The most recent summit meeting between President Joe Biden and Republican negotiator Kevin McCarthy ended again without a result on Monday evening. The two sides were optimistic that they could find a compromise. However, the experts urged caution. “For the overheated stock markets, there is still a clear risk that the mood will change if the fronts in Washington harden again and an agreement is a long way off,” said strategist Jürgen Molnar from broker RoboMarkets.
In terms of individual values, the share of the video conferencing specialist lost zoom more than eight percent after disappointing quarterly figures. The US regional banks, on the other hand, extended their profits from Monday. The sale of a US Regional Bank home loan portfolio PacWest had blown up the whole sector. PacWest shares were also up 7.9 percent on Tuesday. The KBW index for the regional banks increased by 0.9 percent.
Share certificates were in demand Broadcom with an increase of 1.2 percent. The US tech company Apple has struck a multi-billion dollar deal with the chipmaker to use US-made semiconductors. Under the multi-year agreement, the companies will develop 5G radio components to be manufactured at multiple locations across the United States. Apple paper, on the other hand, fell by 1.5 percent.
The dispute over the US debt limit also made investors in Europe nervous. The leading German index dax closed 0.4 percent lower on Tuesday at 16,153 points. Its European counterpart, the EuroStoxx50crumbled by around one percent to 4342 points.