Mon. Jul 8th, 2024

US stocks fall to end the week with a loss as traders assess debt ceiling outlook<!-- wp:html --><p class="copyright">Brendan McDermid/Reuters</p> <p>US stocks slid on Friday as traders assessed the outlook on the debt ceiling crisis and recession odds. <br /> All three indexes ended lower, with the S&P 500 notching its second straight losing week.<br /> Meanwhile, Fed Governor Michelle Bowman floated another possible rate hike as inflation is still high. </p> <p>US stocks slid Friday as investors assessed the outlook on the US debt ceiling crisis. All three major indexes ended the day lower, with the S&P 500 notching its second straight losing week.</p> <p>President Joe Biden was scheduled to meet with other lawmakers on Friday to discuss a possible solution to the debt ceiling crisis, though talks have been postponed until next week. Congress now has just a few weeks to raise the national debt limit before the government could potentially run out of money, per <a href="https://www.businessinsider.com/janet-yellen-debt-ceiling-government-run-out-money-june-1-2023-5">Treasury Secretary Janet Yellen's estimate</a>.</p> <p>Federal Reserve Governor Michelle Bowman also floated the possibility that the Fed may issue another interest rate hike to tackle high inflation, raising further fears that tighter Fed policy could spark a recession.  </p> <p>The University of Michigan consumer sentiment survey dipped to 57.7 in May, its lowest level in six months. Meanwhile, inflation expectations over the next five years rose to 3.2%, the highest level the survey recorded since 2008.</p> <p><strong>Here's where US indexes stood at the 4:00 p.m. closing bell on Friday: </strong></p> <p><a href="https://markets.businessinsider.com/index/s&p_500?utm_source=markets&utm_medium=ingest%3Futm_source%3Dmarkets&utm_medium=ingest&utm_medium=ingest&utm_source=markets"><strong>S&P 500</strong></a><strong>: </strong>4,124.12, down 0.16% <a href="https://markets.businessinsider.com/index/dow_jones?utm_source=markets&utm_medium=ingest%3Futm_source%3Dmarkets&utm_medium=ingest&utm_medium=ingest&utm_source=markets"><strong>Dow Jones Industrial Average</strong></a><strong>: </strong>33,300.62, down 0.03% (8.89 points)<a href="https://markets.businessinsider.com/index/nasdaq_composite?utm_source=markets&utm_medium=ingest%3Futm_source%3Dmarkets&utm_medium=ingest&utm_medium=ingest&utm_source=markets"><strong>Nasdaq Composite</strong></a><strong>:</strong> 12,284.74, down 0.35%</p> <p><strong>Here's what else is going on: </strong></p> <p><a href="https://markets.businessinsider.com/news/bonds/debt-ceiling-crisis-default-pathetic-government-revenue-spending-cuts-gdp-2023-5?_gl=1*1z0zxx5*_ga*MjMxMzA1Mzg2LjE2NTY0NDQxNTU.*_ga_E21CV80ZCZ*MTY4MzkwNTMyOS4yNTIuMS4xNjgzOTA1NTczLjYwLjAuMA..">The debt ceiling crisis is "pathetic"</a> since government revenue is near a record high, according to top economist David Rosenberg.<a href="https://markets.businessinsider.com/news/commodities/best-long-term-investment-gold-vs-stocks-real-estate-gallup-2023-5">Gold jumped ahead of stocks</a> as Americans' preferred long-term investment.<a href="https://markets.businessinsider.com/news/stocks/mega-cap-stocks-recession-risk-bull-market-rally-cyclical-jpmorgan-2023-5">Mega-cap stocks face a bigger sell-off</a> as a recession looms, JPMorgan warned.<a href="https://markets.businessinsider.com/news/currencies/dollar-dominance-dedollarization-russia-sanctions-central-bank-reserves-gold-yuan-2023-5">Dollar dominance is stronger because of sanctions</a>, not weaker, a former US Treasury official said.<a href="https://markets.businessinsider.com/news/stocks/banks-fdic-insurance-fund-fee-depositors-svb-signature-lenders-crisis-2023-5">Big banks could cover 95% of the cost to refill the $16 billion hole</a> blown in the FDIC's deposit insurance fund.<a href="https://markets.businessinsider.com/news/bonds/recession-credit-crunch-us-economy-debt-default-bank-of-america-2023-5">A recession and a credit crunch could result in $1 trillion</a> of corporate debt defaults, Bank of America warned.<a href="https://markets.businessinsider.com/news/stocks/elon-musk-twitter-new-ceo-tesla-stock-price-gene-munster-2023-5">Elon Musk stepping down as Twitter CEO</a> may only be partly positive for Tesla investors, Gene Munster said.<a href="https://markets.businessinsider.com/news/stocks/stock-market-outlook-finra-margin-debt-decline-soft-landing-economy-2023-5">Margin debt used to buy stocks has plunged</a> by $329 billion as investors de-risk their exposure to the stock market.</p> <p><strong>In commodities, bonds, and crypto: </strong></p> <p>Oil prices fell. <a href="https://markets.businessinsider.com/commodities/oil-price?type=wti">West Texas Intermediate</a> was down 1% to $70.14 a barrel. <a href="https://markets.businessinsider.com/commodities/oil-price?utm_medium=ingest&utm_source=markets">Brent crude</a>, the international benchmark, dropped 1% to $74.24 a barrel<a href="https://markets.businessinsider.com/commodities/gold-price?utm_source=markets&utm_medium=ingest%3Futm_source%3Dmarkets&utm_medium=ingest&utm_medium=ingest&utm_source=markets">Gold</a> lost 0.16% to trade at $2,017.10 per ounceThe<a href="https://markets.businessinsider.com/rates/u-s--rates-10-years?utm_medium=ingest&utm_source=markets"> 10-year Treasury yield</a> rose six basis points 3.46%<a href="https://markets.businessinsider.com/currencies/btc-usd?utm_medium=ingest&utm_source=markets">Bitcoin</a> slipped 1.34% to $26,481</p> <div class="read-original">Read the original article on <a href="https://www.businessinsider.com/stock-market-news-today-us-debt-ceiling-default-recession-fears-2023-5">Business Insider</a></div><!-- /wp:html -->

US stocks slid on Friday as traders assessed the outlook on the debt ceiling crisis and recession odds. 
All three indexes ended lower, with the S&P 500 notching its second straight losing week.
Meanwhile, Fed Governor Michelle Bowman floated another possible rate hike as inflation is still high. 

US stocks slid Friday as investors assessed the outlook on the US debt ceiling crisis. All three major indexes ended the day lower, with the S&P 500 notching its second straight losing week.

President Joe Biden was scheduled to meet with other lawmakers on Friday to discuss a possible solution to the debt ceiling crisis, though talks have been postponed until next week. Congress now has just a few weeks to raise the national debt limit before the government could potentially run out of money, per Treasury Secretary Janet Yellen’s estimate.

Federal Reserve Governor Michelle Bowman also floated the possibility that the Fed may issue another interest rate hike to tackle high inflation, raising further fears that tighter Fed policy could spark a recession.  

The University of Michigan consumer sentiment survey dipped to 57.7 in May, its lowest level in six months. Meanwhile, inflation expectations over the next five years rose to 3.2%, the highest level the survey recorded since 2008.

Here’s where US indexes stood at the 4:00 p.m. closing bell on Friday: 

S&P 500: 4,124.12, down 0.16% Dow Jones Industrial Average: 33,300.62, down 0.03% (8.89 points)Nasdaq Composite: 12,284.74, down 0.35%

Here’s what else is going on: 

The debt ceiling crisis is “pathetic” since government revenue is near a record high, according to top economist David Rosenberg.Gold jumped ahead of stocks as Americans’ preferred long-term investment.Mega-cap stocks face a bigger sell-off as a recession looms, JPMorgan warned.Dollar dominance is stronger because of sanctions, not weaker, a former US Treasury official said.Big banks could cover 95% of the cost to refill the $16 billion hole blown in the FDIC’s deposit insurance fund.A recession and a credit crunch could result in $1 trillion of corporate debt defaults, Bank of America warned.Elon Musk stepping down as Twitter CEO may only be partly positive for Tesla investors, Gene Munster said.Margin debt used to buy stocks has plunged by $329 billion as investors de-risk their exposure to the stock market.

In commodities, bonds, and crypto: 

Oil prices fell. West Texas Intermediate was down 1% to $70.14 a barrel. Brent crude, the international benchmark, dropped 1% to $74.24 a barrelGold lost 0.16% to trade at $2,017.10 per ounceThe 10-year Treasury yield rose six basis points 3.46%Bitcoin slipped 1.34% to $26,481

Read the original article on Business Insider

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