Investors continue to digest a mixed bag of earnings reports as debt ceiling negotiations remain deadlocked. US stocks closed weak on Friday (19th), with financial stocks performing poorly. The S&P ended the day down 0.14%, breaking its two-day winning streak. The Dow slipped over 100 points, the Nasdaq fell 0.24%, and the Russell 2000 dropped 0.62%. The Republican and Democratic parties suspended negotiations on raising the debt ceiling on Friday, fueling growing anxiety in the financial markets as the deadline approaches.
The market continues to closely monitor the prospects of the Federal Reserve's monetary policy. On Friday, Fed Chair Powell stated that price stability is the foundation of a strong economy and maintaining price stability is the central bank's responsibility. Given that US inflation is well above the 2% target, there may be no need for further interest rate hikes considering the potential credit pressure. As several regional banks continue to fail, there may be a need for more bank mergers to take place.
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