US stocks trade lower as debt ceiling showdown outweighs strength in mega-cap tech

• US stocks dropped on Tuesday as the debt ceiling deadline quickly approaches with no deal yet to be had.

• President Joe Biden and House Speaker Kevin McCarthy were scheduled to continue their negotiations.

• Treasury Secretary Janet Yellen warned that “time is running out” on a debt ceiling agreement. 

US stocks traded lower on Tuesday as investor stress about the ongoing debt ceiling showdown outweighed the strength seen in mega-cap tech stocks.

Alphabet and Amazon both surged more than 2%, while Microsoft jumped 1%. Apple stock was up about 0.5%.

President Joe Biden and House Speaker Kevin McCarthy met at 3 p.m. today to further negotiate on a potential debt ceiling deal, and time is running out as Biden prepares to travel to Asia for a foreign policy trip. The Biden administration said the President would cut his trip short and come home early to ensure a deal gets done in Congress.

Meanwhile, Treasury Secretary Janet Yellen warned that “time is running out” and that the debt ceiling showdown is already impacting Americans.

“Every single day that Congress does not act, we are experiencing increased economic costs that could slow down the US economy,” Yellen said in prepared remarks to a banking conference on Tuesday. “We are already seeing the impacts of brinksmanship: investors have become more reluctant to hold government debt that matures in early June.”

Also weighing on stocks on Tuesday were earnings results from Home Depot, which revealed weaker-than-expected guidance as consumers focus on smaller home improvement projects.

Here’s where US indexes stood at the 4:00 p.m. ET close on Tuesday:

Here’s what else happened today:

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In commodities, bonds and crypto:

• West Texas Intermediate crude oil fell 0.63% to $70.66 per barrel. Brent crude, oil’s international benchmark, dropped 0.66% to $74.73.

• Gold fell 1.42% to $1,993.90 per ounce.

• The yield on the 10-year Treasury jumped 3 basis points to 3.54%.

• Bitcoin dropped 0.83% to $26,948, while ether rose 0.03% to $1,817.

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