Risk of default in the US as soon as 1 June
Federica Montella | May 10, 2023 11:54
Wall Street went down yesterday
Tuesday has been a negative day for the US stock market.
All three major US indexes reported losses.
The S&P 500 finished at -0.46%, the Nasdaq ended the trading session at -0.63% and the Dow Jones closed at -0.17%.
The negative movement has been driven by worries about the U.S. debt ceiling.
The investors' sentiment is Greed, as indicated in the graph below:
Sentiment indicator - Fear & Greed Index
The market sentiment is 60, in “Greed” mode, in line with the previous day.
Risk of default in the US as soon as 1 June
There is the risk that the US government could default on its obligation for the first time ever.
Janet Yellen, the US Treasury Secretary, announced that if the debt ceiling isn’t raised by 1 June the US government will not be able to pay its obligations on time.
President Joe Biden talked with the congressional leaders yesterday, and they are going to meet again on Friday to find a quick solution.
What to watch today
The latest consumer-price index is due for release today at 13:30 GMT.
The CPI year over year for April is forecasted to be at 5%, the exact level of the previous month while the core CPI year over year for April is expected to be at 5.5%, down from the previous 5.6% of March reading.
Since inflation is still above the Federal Reserve target of 2%, the central bank could keep raising its interest rate and this will potentially cause a market drop.
Financial markets are going to be volatile today.
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