Why Are Stocks Down Today?

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  • One factor that may be pushing stocks down is the reported pause of talks on raising the nation’s debt limit.
  • Worries about the minutes of the Fed’s last meeting, due to be released later today, could also be pushing stocks down.
  • Stocks finished lower yesterday.
stocks down - Why Are Stocks Down Today?

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Stock futures are indicating a second straight day of declines after the talks on raising the debt ceiling reportedly stalled. Another factor that may be pushing stocks down is this afternoon’s scheduled release of the minutes of the Federal Reserve’s last meeting. Some investors may be worried that the minutes may indicate that the central bank will surprise the Street with another rate hike next month.

The impending April Personal Consumption Expenditures report also looms over the markets today.

Stalled Debt-Limit Talks

Regarding the debt-limit talks, House Speaker Kevin McCarthy reportedly said late yesterday, “We are nowhere near a deal yet.” However, earlier in the day, he stated, “I think, at the end of the day, we can find common ground.”

Another factor that may be pushing stocks down is a report by Bloomberg that the two sides have no more official meetings planned at this point.

A federal court in Boston is also taking up a lawsuit by a federal workers union claiming President Biden can invoke the 14th Amendment to bypass the debt limit. Biden believes he has the authority to do this but believes it would likely be unnecessary.

The Release of the Fed Minutes

The Fed is due to release the minutes of its last meeting this afternoon. Although the central bank left the door open following its previous meeting to pause rate hikes, some investors may be worried that it could raise rates again because the monthly CPI rate is still far below the Fed’s official 2% target.

However, on Monday, one of the central bank’s leading hawks, Minneapolis Federal Reserve President Neel Kashkari, stated that the decision of whether to hike rates or pause is a “close call.”

Further, Kashkari may have been laying the groundwork for a pause when he said, also on Monday, that “If we were to skip in June, that does not mean we’re done with our tightening cycle.”

On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


Article printed from InvestorPlace Media, https://investorplace.com/2023/05/why-are-stocks-down-today-35/.

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