NEW YORK: Wall Street stocks opened lower on Tuesday as investors awaited key inflation data and closely monitored talks on raising the debt ceiling. The market saw pressure on regional bank shares following a mixed end to Monday’s session.
The Dow Jones Industrial Average slipped 0.3 percent to 33,526.15, while the broad-based S&P 500 dropped 0.5 percent to 4,117.67. The tech-rich Nasdaq Composite Index also fell 0.5 percent to 12,192.96.
Investors are eagerly anticipating the release of crucial inflation data later this week, which will provide insights into the current state of the economy and potentially impact the Federal Reserve’s monetary policy decisions. Rising inflation has been a concern in recent months and has the potential to influence market sentiment.
Additionally, market participants are closely watching progress in talks regarding the debt ceiling. President Joe Biden is set to meet with Republican House Speaker Kevin McCarthy and other leaders, although it is unlikely that their discussions will lead to an immediate agreement on lifting the debt limit.
Raising the borrowing limit has become a contentious issue, with Republicans demanding significant spending cuts before agreeing to the routine increase. Failure to reach a decision before the government exhausts its funds to meet obligations could result in a default, leading to financial instability.
Treasury Secretary Janet Yellen acknowledged the significant gap between Republican and Democrat positions, emphasizing the urgency of reaching a resolution to avoid potential economic turmoil.
US banks tightened lending standards
In other news, a Federal Reserve survey released on Monday indicated that banks tightened lending standards in the early months of this year. However, Philip Jefferson, a member of the Fed’s Board of Governors, commented that this tightening was typical for the current stage of the economic cycle.
Among individual companies, Boeing saw a boost with its shares rising 3.3 percent following an announcement that Irish airline Ryanair ordered 300 of its 737 MAX jets, amounting to over $40 billion.
Shares of regional lenders faced downward pressure, with PacWest Bancorp slipping 5.4 percent, Zions Bancorporation edging down 0.2 percent, and Western Alliance Bancorporation falling 4.1 percent.
As the market awaits further economic data and progress on the debt ceiling talks, investors remain cautious, monitoring developments that could significantly influence market dynamics and sentiment.
