STORY: U.S. stocks ended sharply lower on Tuesday as investors grew more anxious over a lack of progress in U.S. debt limit talks.
The Dow lost seven-tenths of a percent, while the S&P 500 and the Nasdaq both lost more than one percent.
Another round of high-stakes negotiations between President Joe Biden’s team and Congressional Republicans ended with no signs of progress as the deadline to raise the government's $31.4 trillion borrowing limit ticked closer.
The U.S. government could default as soon as June 1st, causing economic calamity.
Investors are also waiting for minutes from the Federal Reserve's meeting in early May, due on Wednesday, to assess the central bank's next likely move on interest rates.
As a result, the market is simply “listless”, says Lisa Erickson, Head of Public Markets Group at U.S. Bank Wealth Management.
“There's just a lot of concerns going on, whether it's going to be how the debt impasse is resolved, to more hawkish Fed-speak - in addition to the fact that we're past the bulk of corporate earnings. And really while earnings were better and more resilient than expected, they really did point to a downturn in what's going on in markets.”
Among individual movers, shares of Broadcom gained 1.2% after the chipmaker entered into a multi-billion-dollar deal with Apple to use chips made in the United States. Apple fell one-and-a-half percent.
Zoom Video Communications dropped more than 8% after the video conferencing platform reported its slowest quarterly revenue growth.
Helping limit larger losses, data from S&P Global showed that U.S. business activity rose to a 13-month high in May, lifted by strong growth in the services sector.
The report was the latest sign that the economy held its momentum early in the second quarter despite the risk of a recession.