Stocks Close Notably Lower As Debt Ceiling Talks Make No Significant Progress

U.S. stocks ended notably lower on Tuesday after staying weak right through the day’s session due to sustained selling at several counters.

A lack of significant progress in U.S. debt ceiling negotiations weighed on sentiment. Traders largely shrugged off data showing fairly sharp growth in the nation’s private sector activity.

The major averages all ended notably lower. The Dow ended lower by 231.07 points or 0.69 percent at 33,055.51. The S&P 500 ended down 47.05 points or 1.12 percent at 4,145.58, while the Nasdaq settled at 12,560.25, down 160.53 points or 1.26 percent.

U.S. President Joe Biden and House Speaker Kevin McCarthy said they held productive talks on Monday but there was no agreement on how to raise the government’s $31.4 trillion debt ceiling.

“While there are areas of disagreement, the Speaker and I, and his lead negotiators Chairman McHenry and Congressman Graves, and our staffs will continue to discuss the path forward,” Biden said.

On the U.S. economic front, the S&P Global US Composite PMI rose to 54.5 in May 2023, up from 53.4 the month before, a preliminary estimate showed. The latest reading signaled the fastest pace of expansion in the country’s private sector since April 2022.

The S&P Global Flash US Manufacturing PMI declined to 48.5 in May of 2023 from 50.2 in April, well below forecasts of 50, preliminary estimates showed.

The S&P Global US Services PMI increased to 55.1 in May 2023, up from 53.6 the month before and well above market expectations of 52.6, a preliminary estimate showed.

Data from the Commerce Department showed new home sales in the U.S. jumped by 4.1 percent to an annual rate of 683,000 in April after surging by 4 percent to a revised rate of 656,000 in March.

Economists had expected new home sales to decrease to an annual rate of 670,000 from the 683,000 originally reported for the previous month.

Visa, Intel, Walt Disney, American Express, Microsoft,, Apple Inc., and Boeing shed 1.5 to 2.8 percent.

JP Morgan, P&G, Nike, Merck, 3M, Honeywell International and McDonalds also ended notably lower.

Chevron climbed nearly 3 percent. Home Depot and Wallgreens Boots Alliance both gained about 1.5 percent.

In overseas trading, Asian stocks ended mostly lower on Tuesday as growing China-U.S. tensions and hawkish Fed comments overshadowed optimism related to U.S. debt ceiling talks.

The major European markets closed lower, weighed down by concerns about growth after data showed a contraction in eurozone manufacturing activity, and U.S. debt ceiling worries and signs of increasing Sino-U.S. tensions.

The pan European Stoxx 600 declined 0.6 percent. The U.K.’s FTSE 100 edged down 0.1 percent, Germany’s DAX dropped 0.44 percent and France’s CAC fell 1.33 percent.

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