U.S. Stocks Decline as Debt Ceiling Negotiations Drag On

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U.S. stocks are experiencing a downward trend as negotiations surrounding the nation's debt ceiling continue with an approaching deadline. The Dow Jones Industrial Average fell by 61 points or 0.2%, while the S&P 500 and NASDAQ Composite also saw declines of 0.2% and 0.1% respectively.

President Joe Biden and House Speaker Kevin McCarthy held a meeting at the White House on Monday, expressing optimism that a deal was within reach. However, negotiators are still working towards an agreement on spending levels. To avoid the possibility of a U.S. default, Congress must raise or suspend the debt ceiling in the coming days. Treasury Secretary Janet Yellen has set June 1 as the X-date for this crucial decision.

The uncertainty surrounding the debt ceiling is also impacting Federal Reserve policymakers as they prepare for their next meeting in June. Futures traders are anticipating a pause in interest rate increases next month as officials evaluate the effectiveness of their previous actions in curbing inflation. Some Fed officials have indicated that rates may continue to rise this year, given that inflation currently exceeds the target of 2%.

Investors are eagerly awaiting the release of the Commerce Department's key measure of inflation for April, which will be published on Friday in the form of the personal consumption expenditure index. Additionally, Apple Inc announced a new partnership with chipmaker Broadcom Inc to produce components for 5G radio frequency in the U.S. While Apple's shares dipped 0.8%, Broadcom's shares rose by 1.4%. Lowe's Companies Inc saw a 1.4% increase in its shares, but the retailer revised its annual same-store sales forecast due to declining demand for do-it-yourself home projects. Conversely, Dick's Sporting Goods Inc affirmed its annual sales outlook, causing its shares to decline by 0.8%.

In the commodities market, oil prices rose, with Crude Oil WTI Futures increasing by 1.7% to $73.33 a barrel, and Brent Oil Futures rising by 1.6% to $77.22 a barrel. However, Gold Futures experienced a 0.4% decrease, reaching $1,969.

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