The hope that a compromise could be made in the next few days to avoid a default was dampened as U.S. stocks ended the trading week on a sour note on Friday as early gains faded as U.S. debt ceiling negotiations in Washington were put on hold. The benchmark S&P 500 index rose more than 2% over the previous two sessions as investors gained optimism that a deal to extend the $31.4 trillion debt ceiling may be struck shortly. However, a preliminary gain on Friday was retracted as a result of news that negotiations had been suspended while Federal Reserve Chair Jerome Powell addressed a monetary policy panel.
Dampened Hope for Compromise: Default Concerns and Suspension of Debt Ceiling Negotiations
Top business news today shows the Nasdaq Composite down 30.94 points, or 0.24%, to 12,657.90, while the S&P 500 dropped 6.07 points, or 0.14%, to 4,191.98. To reach 33,426.63, the Dow Jones Industrial Average lost 109.28 points or 0.33%. The S&P 500 rose 1.65%, the Nasdaq increased 3.04%, and the Dow gained 0.38% for the week. The largest weekly percentage increases for the S&P 500 and Nasdaq since the final week of March were recorded.
The outlook for interest rates remained hazy. As the central bank considers the effects of previous rate hikes as indicated by the most recent problems in the banking industry, Powell said it is still uncertain if further rate increases are necessary. CNN reported that U.S. Treasury Secretary Janet Yellen informed bank CEOs on Thursday that additional bank mergers would be required in the wake of many bank failures, which also dampened sentiment.
Today’s business news with the KBW Regional Banking index which was down about 2.17% for the day as shares of regional banks declined. These companies were among the first in the sector to experience the effects of the Fed’s tightening policies. Nevertheless, the index rose 6.2% for the week to break a three-week losing run as investors perceived the sector’s problems as mostly contained for the time being. Following CEO James Gorman’s announcement that he would leave his position within the next 12 months, Morgan Stanley’s stock fell by 2.66%. The footwear retailer Foot Locker Inc. plunged and experienced its largest daily percentage loss since February 25, 2022, after lowering its annual sales and profit projections.
