US stocks were lower Wednesday morning as investors kept a watchful eye on the prospects for the debt-limit deal in an expected House floor vote later. Meanwhile, China’s economic woes pressured global markets.
The S&P 500 (^GSPC) dropped 0.52% while the Dow Jones Industrial Average (^DJI) dipped 0.69% or more than 200 points. The technology-heavy Nasdaq Composite (^IXIC) slipped 0.13% at 10:06 am ET.
US bond yields weakened as investors fretted over the potential impact of the debt-limit deal and braced for the release of fresh jobs data. The yield on the benchmark 10-year Treasury dropped to 3.68%. The two-year note yield slipped to 4.4%, while that on the 30-year bond dropped to 3.9%.
The debt ceiling agreement negotiated by President Joe Biden and House Speaker Kevin McCarthy passed its first key test on Tuesday when it gained approval from the Republican-led House Rules Committee despite opposition from hard-liners. That cleared the way for the deal to go before the House on Wednesday.
The clock is ticking down, as Congress must race to pass the deal to avoid a catastrophic default by June 5. That so-called X-Date is when the US will run out of money to pay its bills, Treasury Secretary Janet Yellen has warned.
Republican House Speaker Kevin McCarthy speaks to the press after a meeting with President Joe Biden on debt ceiling in Washington, D.C., the United States, May 22, 2023. (Photo by Aaron Schwartz/Xinhua via Getty Images)
Hawkish comments from Federal Reserve officials posed a headwind for Wall Street. Federal Reserve Bank of Richmond President Thomas Barkin said Tuesday he’s looking for signs that demand is cooling to be convinced that inflation will ease, speaking at a National Association for Business Economics event.
Meanwhile, Federal Reserve Bank of Cleveland President Loretta Mester, president of the Federal Reserve Bank of Cleveland, said she sees no “compelling reason” to pause interest-rate increases amid the debt-limit deal, speaking in a Financial Times interview published Wednesday.
Fed officials Patrick Harker, Susan Collins, and…
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