2023-05-22 22:02:00
The S&P 500 finished little changed on Monday as Wall Street awaited a pivotal debt ceiling meeting and government officials scrambled to avert a default.
The benchmark index inched 0.02% higher to finish at 4,192.63, while the Dow Jones Industrial Average lost 140.05 points, or 0.42%, to end at 33,286.58. The Nasdaq Composite gained 0.5% to settle at 12,720.78.
Monday’s moves brought the tech-heavy index to its highest close and highest intraday level since August.
President Joe Biden and House Speaker Kevin McCarthy are set to meet Monday at 5:30 p.m. ET to continue debt ceiling talks, with just 10 days left before the earliest date that Treasury Secretary Janet Yellen said the U.S. could realistically default.
Veteran negotiators on both sides resumed talks Monday morning in the Capitol, but mandatory government spending cuts remain a major obstacle. Republicans insist on paring back spending to baseline 2022 levels, but Biden said that any cuts across the board without additional tax hikes are out of the question.
“Investors are starting to get concerned about what’s happening with the debt ceiling talks, but on the other hand, the economy still is pretty strong, the job market’s really strong,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance.
Major averages are coming off a winning week. Led by technology stocks, equities continue grinding higher despite uncertainty in Washington and sticky inflation, with the S&P 500 hovering just below the 4,200 level.
While the technology trade may have further to run, some on Wall Street say stronger market breadth is needed for a rally to continue longer term.
“If the rest of the market doesn’t participate, then there’s an end to this,” said Sylvia Jablonski, CEO at Defiance ETFs, adding that stronger market breadth could come after the Federal Reserve’s June meeting.
Monday ushered in a relatively light week for economic data, with a second reading for first-quarter GDP slated for Thursday and the personal consumption expenditures gauge, the Fed’s preferred inflation measure, due Friday.
The release of Fed minutes on Wednesday from the May meeting could shed light on how central bankers are thinking about the possibility of further rate hikes.
First-quarter earnings season is winding down, but notable reports loom from Zoom Video, Lowe’s and Dick’s Sporting Goods.
— CNBC’s Christina Wilkie contributed reporting
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