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Wall Street stumbles. Powell’s summer heats up the debt ceiling

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Wall Street stumbles. Powell’s summer heat is hotter than the debt ceiling

Despite the vote to raise the US debt ceiling on Wednesday, in the House of Representatives, it was the future of the Federal Reserve’s monetary policy that weighed most heavily on investor sentiment. The expectation of a break in interest rate hikes in June sent a debt rush, at the expense of the risk market.

Wall Street ended the session in the negative territory, on a day when the “yields” of North American debt eased, after some members of the Federal Reserve in North America pointed to the possibility of stopping the rise of funds. The interest rate at the next meeting of the Central Bank scheduled for June.

The Dow Jones Industrial Average fell 0.41% to 32,908.27 points, while the Standard & Poor’s 500 (S&P 500) fell 0.61% to 4,179.83 points.

The Nasdaq Technology Composite Index fell 0.63% to 12,935.29 points.

Among the sectors that focused attention and placed more emphasis on sentiment, banking stood out, after the US Federal Deposit Insurance Agency (FDIC) reported an increase in banks with an increase in weakness in the first quarter.

In the debt market, the two-year bond “yield” — most sensitive to Fed moves — floated 4.7 basis points to 4.403%.

Ten-year debt interest fell 4.8 basis points to 3.639%, in a move that was followed by bond yields across all maturities.

Governor Philip Jefferson has indicated that the Fed may pause rate hikes in June to give members of the Federal Open Market Committee more time to assess economic developments.

In line with this idea, the head of the Central Bank of Philadelphia stated that “we can skip the next meeting.”

Investors are still waiting for the decision to raise the US debt ceiling. The bill will be voted on Wednesday in the House of Representatives (scheduled for 20:30 local time [1h30 de quinta-feira em Lisboa]), and then missed the Senate – this is as Congress rushes to avoid a “default” for the United States, scheduled for June 5 by the country’s Treasury Department, if new rules on the “debt ceiling” do not come into force.

Investors closely watched shares of Hewlett Packard Enterprise, which rose more than 7% — buoyed by higher-than-analyst estimates for the quarter’s guidance.

American Airlines rose more than 1% after it raised its profit forecast for the year.

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