U.S. stocks opened lower on Tuesday after President Joe Biden and Republican House Speaker Kevin McCarthy’s debt ceiling talks the day before ended, with the two taking a your optimist, but without agreement.
The S&P 500 (^GSPC) fell 0.46%. The Dow Jones Industrial Average (^ DJI) slipped 0.48% or more than 100 points and the tech-heavy Nasdaq Composite (^IXIC) decreased by 0.5%.
In Treasuries, yields rose across the curve on Tuesday, with the benchmark 10-year yield hitting 3.74%. Two-year yields climbed to 4.37% and those on 30-year bonds to 3.99%. The gains came as concerns over the debt ceiling standoff intensified as the prospect of a default drew closer.
President Joe Biden and House Speaker Kevin McCarthy said Monday’s meeting was a “productive conversation” but the two sides still fell short of an agreement.
McCarthy said he plans to speak with Biden every day “until it’s done.” But he warned that “there is nothing agreed, everything is under discussion”.
It left investors jittery in the June countdown 1 “X-date”that is, when Treasury Secretary Janet Yellen said a default is likely to occur.
“Our base-case scenario remains that the debt ceiling is eventually lifted/suspended, although the journey to that end could be the eleventh hour and result in market volatility significantly higher than that currently enjoyed by the market,” Dubravko Lakos, chief U.S. equity strategist at JPMorgan, wrote in a note on Monday.
“We expect a temporary/comprehensive debt ceiling agreement to negatively impact federal spending and a likely contentious budget negotiation process later this year,” Lakos added.
On the economic front, S&P Global’s flash reading on the US manufacturing sector came in at 48.5, lower than economists’ estimate for a figure of 50.0. Services rose to 55.1, while economists had expected 52.5.
In single stock moves, Yelp Inc. stock (YAP) rose more than 10% when activist investor TCS Capital Management confirmed its stake in the company and asked the company to explore strategic alternatives, including a sale, according to a open letter to Yelp board Tuesday.
Lowe’s Companies, Inc. (WEAK) shares fell after the home improvement company cut its full-year sales forecast on Tuesday, citing weaker demand as high inflation impacts discretionary spending.
Shares of Dick’s Sporting Goods (SDKs) rose more than 2% after the company topped its fiscal first-quarter sales and earnings, while maintaining its outlook for this year
Zoom Video Communications, Inc. (ZM) shares fell more than 2% after the video conferencing software company posted a beating on its results for its fiscal first quarter. The company also raised its forecast for the full year.
Pfizer Inc. Shares (DFP) slipped after a study showed positive weight loss results for patients taking the drugmaker’s oral diabetes treatment.
BJ’s Wholesale Club Holdings, Inc. (bj) shares fell more than 4% after the retailer reported revenue below analysts’ expectations. Comparable club sales, excluding gasoline, were lower than expected.
After the closing bell, Palo Alto Networks, Inc. (PANW), Intuit Inc. (INTU) and Toll Brothers, Inc. (TOL) should report the results.
Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv
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