THE GIST (“THE WHAT”)
Debt ceiling stalemate ahead of a looming deadline continued to weigh down on the broader market sentiment. Trading sideways in a tight range for most part of the session, the S&P 500 index closed the choppy session at day’s lows at 4109.89, down 26.38 points (-0.64%).
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THE DETAILS (The “How & Why”):
Markets are closely watching the debt ceiling negotiations that have not yielded in any deal as yet, despite Treasury Secretary Yellen reiterating the risks of running out of cash as soon as June 1 unless the debt ceiling is raised.
Investors rotated out of utilities and defensive stocks and piled into safe-haven mega-cap tech names as yields inched higher. Advanced Micro Devices led the semiconductor sector higher, jumping 4%. Amazon also rose 1.98% on reports that it plans to add ChatGPT-style products search to its web store.
Meanwhile, Home Depot led the consumer discretionary sector lower, falling 2.15% on missing earnings estimates and reducing full-year guidance. Horizon Therapeutics was another major decliner, tumbling 16% following reports that the federal regulators could challenge the company’s sale to Amgen.
On the economic data front, U.S. April retail sales came in weaker-than-expected, rising 0.4% month-over-month as against the expected 0.8%. However, U.S. manufacturing production rose more than expected by 1%, compared to the expected 0.1% month-over-month. The U.S. May NAHB housing market index also rose unexpectedly to a 10-month high.