Bitter tugging in Congress
New concern about debt dispute depresses US stock market
05/19/2023, 11:55 p.m
On Wall Street, the Dow Jones is slightly down. In particular, the debt dispute burdens the values. Tech stocks have had an excellent year so far, thanks largely to developments in the field of artificial intelligence.
The US stock exchanges have given way after the clear gains of the previous day. On Thursday, the confidence that the debt dispute would be resolved in the near future was still driving the most important indices, some of them significantly. On Friday, skepticism prevailed again, especially since latecomers had sent mixed signals in the quarterly reporting season of companies.
The leading index Dow Jones Industrial gave up initial gains and ended down 0.33 percent to 33,426.63 points. On a weekly basis, there is an increase of 0.38 percent. The market breadth S&P 500 lost 0.14 percent on Friday to 4191.98 points. For the Nasdaq 100 as a selection index for technology stocks, it fell by 0.22 percent to 13,803.49 points.
The big breakthrough in the debt dispute has not materialized so far. There was even a setback on Friday: the Republicans had left negotiations on raising the debt ceiling. In fact, Republicans and Democrats regularly argue about raising the debt limit. The non-governing side then tries to force concessions on its own political demands in exchange for its approval. This time, however, the procedure has degenerated into bitter party-political wrangling, which is dangerous for the USA and beyond: A default – which is already looming in early June – in the world’s largest economy could trigger a global financial crisis and an economic downturn.
Undeterred by this, tech stocks in particular have had a strong year 2023 so far. The Nasdaq 100 has already gained more than a quarter. However, it was particularly strong in 2022 and suffered from the rise in interest rates. One reason for the last good run: the hype about artificial intelligence (AI). Investors in the US have been pumping money into tech stocks on a large scale for weeks.
The euro was last listed at 1.0802 US dollars. The European Central Bank had set the reference rate at 1.0808 (Thursday: 1.0813) dollars. The dollar thus cost 0.9252 (0.9248) euros. The futures contract for ten-year US bonds (T-Note Future) recently fell by 0.32 percent to 113.56 points. In return, the yield on ten-year paper rose to 3.70 percent.