As GOP negotiators stopped ongoing debt ceiling talks on Friday, stocks dropped, fueling skepticism that a solution would be achieved soon.
The decline in the Dow Jones Industrial Average was 113 points, or 0.34%. While the Nasdaq Composite fell 0.29%, the S&P 500 moved lower by 0.16%.
These actions follow GOP negotiators’ exit from a debt ceiling conference on Friday, which was reportedly caused by Rep. Garret Graves’ assertion that the White House team is being “unreasonable,” according to NBC News. We won’t be talking to ourselves while we’re here, Graves declared.
However, Friday’s losses were contained as Federal Reserve Chairman Jerome Powell suggested that interest rates may not need to increase as much as anticipated to combat inflation.
Markets were trading better in the early hours of today’s trading day, in large part because of a more bullish or constructive atmosphere around the debt ceiling negotiations. This week has been fairly supportive for markets. And today there was a little bit of a hiccup since the negotiations were put on hold, according to Art Hogan of B. Riley Financial.
“That’s not the end, in my opinion. But I do believe that there will be some selling going into the weekend if there is any doubt over the debt ceiling, Hogan added.
The key averages continued to trend upward during the week. The S&P 500 has increased 1.7% this week. Its largest one-week rise since March would be that. In contrast, the Nasdaq Composite has increased 3.1% for the week. Its best weekly performance since March would also be that. By 0.4%, the Dow is up.
A portion of those gains occurred on Thursday as traders increased their expectations that a deal on the US debt ceiling may be struck. House Speaker Kevin McCarthy’s remarks on Thursday seemed to imply that a potential agreement might be reached as early as next week.