Global stocks tumble on worries about US debt default

Investors’ focus is on Washington, where President Joe Biden and House Speaker Kevin McCarthy have had a number of meetings to find a path to lift the debt limit from the current $31.8 trillion ahead of a June 1 deadline.

US stock indices declined on Wednesday.

The S&P 500 lost 30.34 points, or 0.73%, at 4,115.24. The Dow Jones Industrial Average fell 255.59 points, or 0.77%, at 32,799.92. The Nasdaq Composite dropped 76.08 points, or 0.61%, at 12,484.16.

Citigroup Inc stock fell 3.1% as the bank scrapped a $7 billion sale of its Mexican consumer unit Banamex. The bank said it will list Banamex.

Analog Devices tumbled 7.8% despite reporting strong profit and revenue.

Agilent Technologies fell 5.9% despite reporting better-than-expected results.

Kohl’s climbed 7.5% after reporting a surprise profit for its latest quarter.

Homebuilder Toll Brothers shares gained 2.1% after reporting strong results.

The yield on the 10-year treasury rose to 3.73% from 3.70% late Tuesday. The yield on the 2-year treasury increased to 4.37% from 4.33%.

Currencies

The US dollar rose to 139.16 Japanese yen from 138.48. The euro fell to $1.0750 from $1.0776.

Canada

Canada stocks fell on Wednesday as two major banks reported smaller-than-expected quarterly profits.

The Toronto Stock Exchange’s S&P/TSX composite index ended down 218.32 points, or 1.1%, at 19,927.69.

Bank of Montreal and Bank of Nova Scotia shed 3.9% and 1.3%, respectively.

Europe

European stocks slipped on Wednesday on little progress in the US debt ceiling talks and on a jump in UK core inflation.

The pan-European STOXX 600 index dropped 1.8%.

Britain’s FTSE 100 fell 1.8% at 7,627.10. Germany’s DAX lost 1.9% at 15,842.13. France CAC 40 plunged 1.7% at 7,253.46.

Real estate stocks dipped 3%, followed by over 2% losses in travel and leisure and insurance shares.

A report showed that core measure of UK price growth surged to a 31-year high in April.

Asia

Asian stock markets fell on Wednesday.

Hong Kong’s Hang Seng index dropped 1.6% at 19,115.93. China’s Shanghai Composite shed 1.3% at 3,204.75. Japan’s Nikkei 225 fell 0.9% at 30,682.68.

Australia’s S&P/ASX 200 index finished 0.6% lower at 7,213.8 points. New Zealand’s benchmark S&P/NZX 50 index climbed 0.2% at 11,995.27 points.

Markets in South Korea, Taiwan and Singapore also declined.

Energy prices

Brent crude for July delivery gained $1.52 to $78.36 a barrel on Wednesday. US crude oil benchmark for July delivery rose $1.43 to $74.34 a barrel. 

Natural gas for June delivery rose 8 cents to $2.40 per 1,000 cubic feet.

Bullion

Gold for June delivery fell $9.90 to $1,964.60 an ounce. Silver for July delivery lost 38 cents to $23.24 an ounce.