US Stocks Fall as Debt Ceiling Talks Stall, Investors Cut Bets on June Rate Hike: Analyst Calls AI A ‘Baby Bubble’ – Invesco QQQ Trust, Series 1 (NASDAQ: QQQ), SPDR S&P 500 (ARCA: SPY)

After a positive start to the session, the stock market turned into a Red Friday at the House Speaker Kevin McCarthyParty representatives walked out of a private meeting with White House officials, calling the other side “unreasonable” and endangering talks on the debt ceiling.

Risk hit all major indices and nearly all sectors, with a few noteworthy exceptions, such as energy, which was supported by the resilience of oil and natural gas prices. Chairman of the Federal Reserve Jerome Powell and former Federal Reserve Chairman Ben Bernanke He delivered monetary policy remarks earlier today.

CME Group Fedwatch reported that traders’ expectations for a rate hike in June dropped from as likely as 42% earlier in the day to as high as 15%.

Signals from Friday trading:

All of the major averages traded were weaker during the session, with the Nasdaq 100 down nearly 0.5%, the Dow down 0.4% and the S&P 500 down 0.4%.

Small companies were the weakest link, with the Russell 2000 down 1%.

The performance of US indices on Friday
index Performance (+/-) value
Nasdaq 100 -0.45% 13,794.30
S&P 500 index -0.22% 4,189.18
Dow Industries -0.42% 33412.75

analyzer color:

Michael Hartnett, chief investment strategist at Bank of America, has described AI as a “mini-bubble” that has inflationary effects on the economy. “Bubbles have been in the right things, like the Internet, and the wrong things, like housing, always starting with easy money, and always ending with price hikes,” Hartnett said.

“We do not advise chasing a bubble in 2023,” he said, noting that more than 200 basis points of Fed rate cuts had already been priced in until the 2024 election.

Friday trading in major US stock ETFs: At noon on Friday, the SPDR S&P 500 ETF Trust spy It was 0.2% lower, to $418.40 The SPDR Dow Jones Industrial Average ETF DIA It fell 0.6% to $334.20 and Invesco QQQ Trust QQQ It fell 0.3% to $336.30, according to Benzinga Pro data.

Almost all sectors of US stocks, except for the sector, were negative SPDR Energy Sector Selection Fund XLK and the health care Select the SPDR box sector XLVwhich were trading up 1% and 0.5%, respectively.

It was his weakest performance Available Select the SPDR box sector XLYdown 1%, and Selection of the Communications Services Sector Fund SPDR xlcwhich decreased by 0.5%.

See also: Best futures trading software

Stock focus:

Foot Locker, Inc. fl It fell 26% after reporting weaker-than-expected financial results in the most recent quarter.

Aemetis, Inc. AMTX It rose 38%, after rising 17% Thursday, when the company announced approval by the U.S. Environmental Protection Agency for a subsidiary of its renewable natural gas production facility.

VF Corporation VFC The worst performer was the S&P 500, down 8.4%. The company will report its quarterly financial results on Tuesday.

Airbnb, Inc. ABNB It fell nearly 4%, the worst performer among the components of the Nasdaq 100.

  • WeWork we It extended declines of 14% to record lows, following headlines of the departure of its chief executive.
  • Nutanix, Inc. NTNX fell more than 2.5% and Applied Materials, Inc. AMAT They fell more than 1.5% after their respective quarterly results.
  • E-commerce retailer Farfetch Limited FTCH It rose more than 20% in its earnings report.
  • Commodities, bonds and other global stock markets:

Crude Oil fell slightly, by 0.4%, to $71.78 a barrel.

the United States Oil Fund ETF USO It was 0.3% lower, to $63.87 a share.

Treasury yields rose slightly, with the 10-year yield up 2 basis points to 3.67% and the 2-year yield flat at 4.25%. the iShares 20+ Year Treasury Bond ETF TLT It was 0.4% for the day.

Dollar weakness, with the US dollar index, which tracks it Invesco DB Bullish Dollar Index ETF UUP, down 0.4%. The EUR/USD pair, which is tracked by Invesco CurrecyShares Euro Currency Fund FXEit was 0.5% lower to 1.0818.

European stock indices ended the session higher, with Germany’s DAX nearing record highs. the iShares MSCI Eurozone ETF EZU It rose 0.8%.

Gold rose 1% to $1,977 an ounce. the SPDR Gold Fund gld It was 1% higher, to $183. Silver also rose 1.7% to $21.94 iShares Silver Fund SLV up 1.8% to $21.94 per share. bitcoin Bitcoin / US Dollar It rose 0.3% to $26,890.

Staff writer Piero Cengari updated this report midday Thursday.

Read next: Here’s what happens to oil as the debt ceiling crisis drags on

Image via Shutterstock.

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