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U.S. stocks are falling as debt ceiling talks drag on

AuthorLiz Moyer
Published 05/24/2023, 10:36 AM
Updated 05/24/2023, 11:50 AM
© Reuters.

Investing.com -- U.S. stocks were falling as the debt ceiling talks dragged on with no solution in sight.

At 11:49 ET (15:49 GMT), the Dow Jones Industrial Average was down 257 points or 0.8%, while the S&P 500 was down 0.8% and the NASDAQ Composite was down 0.9%.

Investors have been hoping for a resolution to the debt ceiling standoff in Washington, with an early June deadline just days away. If Congress doesn’t raise or suspend the ceiling, the government risks the possibility of defaulting on its obligations, something economists and Biden administration officials have warned could cause chaos in financial markets.

Democrats and Republicans are trying to hammer out details on spending levels as part of reaching an agreement, though the sides still appear far apart as of Wednesday morning.

At the same time, investors are looking to the release of the Federal Reserve’s meeting minutes from its last policy session, when it raised rates another quarter of a percentage point. Since then, officials have indicated a pause may be in order in June as they assess the progress of their actions so far to cool inflation.

One key data input will be Friday’s report on personal consumption expenditures, a measure of inflation closely watched by the Fed as it makes its monetary policy.

Uncertainty is raising the level of volatility in markets, with the CBOE Volatility Index, or VIX, up 10.9% on Wednesday, to just over 20.

Citigroup Inc. (NYSE:C) stock fell 3% after the bank said it would spin off its operations in Mexico in an initial public offering after trying to find a buyer for it.

Kohl’s Corp. (NYSE:KSS) shares jumped 6.7% after the department store operator reported better-than-expected quarterly results, including a surprise profit.

Latest comments

further delay , messing up would result in dems' landslide win in elections. if so, so be it.
now that's funny 🤣🤣
raise debt limit, be happy for people.
Reaching the debt ceiling is not the US government having too much debt, but the ability for the government to pay its debts off in due time. The government can pay all of its debt off now, but it has already hit the limit to which it can pay/have debt. Sounds stupid right? Tell that to the government.
Stupid that Congress imposed this limit on itself, then passed spending/budget bills that exceed its self-imposed limit, then bicker over increasing this limit.  This limit is not even required by the Constitution, but the 14th Amendment is part of the Constitution.
since 1960, there are 78 times debt ceiling raised (on average every year)... why so worry.... just a short term drama by politicians for few days..
Funny, when stocks rose and thwy said stocks rose on hooes of debt ceiling, while on the other hand they mentioned stocks fell as debt ceiling talks drag, same meaning, different market conditions BS article
print more money and be happy for people
  What name calling?
  Democrats never planned/wanted the debt ceiling as an issue.
  You're the one who accuse Dem of "plan" and "collusion", so onus is on you for evidence.
maybe tentative deal reached, iron out?
Default now or default later. It's all the same if we don't cut spending.
do you ask your credit card company to raise your limit so you can pay your bill? no of course not, they cut you off until you pay. that's a debt ceiling
Democrats are the only people that could ask for a 20% raise, only get 10% and say they cut spending by 10%🤣🤣.
  We don't decide what credit limits our credit companies impose on us.  Congress decides what debt limit to impose on itself.  Your delusion that the US debt limit is exactly like your credit card limit is holding back your understanding.
the credit-rating agency Standard & Poor's will again downgrade the credit rating of the United States government .
lmao the repeat of the surplus under newt Gingrich paired with the tax increases under George Bush sr. you're too funny.
I guess NK thinks we have had gov't surplus under Biden.
  Newt Gingrich was never potus.
deal reached?
positive overnight
now this means a seriously stock plummet which is a good thing depending on where you invest 🤔
first you are correct, we can not repeat this Biden disaster again
  The Dems supports unconditional debt limit increase.  McCarthy can't because his Speaker seat in on the line; he's beholden to his party's extremists instead of the country's interest.
that's the problem, democrats want to bankrupt the country
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