Fears over the debt ceiling dragged down stock markets

The S&P 500 fell further on Tuesday morning after a key meeting between President Joe Biden and House Speaker Kevin McCarthy on the debt ceiling failed to produce results.

The Dow Jones Industrial Average stagnated. The S&P 500 was down 0.2%, while the Nasdaq Composite was down 0.1% as of 6pm Hungarian time.

McCarthy and Biden met at the White House on Monday night, and the speaker called the meeting “productive” and “professional.” The latest hour of talks – which took place just days before the earliest deadline for the US to repay its debt – ended without a resolution but reflected a more positive tone.

The yield on the 2-year Treasury note rose for a ninth straight day on Tuesday, as traders priced in longer interest rate hikes and weighed in on confusion over the debt ceiling.

The 2-year yield rose to 4.38% in morning trade, along with 3-month and 30-year Treasury yields. The move comes as traders are more bullish on the US economy and steady inflation, which leaves open the possibility of further rate hikes by the Federal Reserve in June and July.