Salesforce's Slump Outweighs Debt Ceiling Bill Optimism
Despite lawmakers passing a bill to suspend the nation's $31.4 trillion debt ceiling, the Dow experienced a downturn due to Salesforce's weak earnings performance. Salesforce, which saw the slowest pace of revenue growth in 13 years, registered a 5.5% drop, contributing to the decline in the Dow Jones Industrial Average.
Congress Pushes Through Debt Ceiling Suspension Bill
Both Democrats and Republicans overwhelmingly supported the bill to suspend the debt ceiling. The legislation is heading to the Senate, where it must be enacted before Monday's deadline when the government might run out of money to pay its bills.
Market Response to Economic Indicators and Fed's Stance
After the bill's passage, investors focused primarily on economic indicators that would set the tone for the U.S. Federal Reserve's future actions. Market watchers are keenly awaiting details on how the Fed's aggressive interest rate-hiking cycle affects the economy.
Employment Reports Indicate Resilient Labor Market
The latest ADP National Employment Report showed an addition of more jobs than anticipated in May, while a marginal rise in the Labor Department's weekly jobless claims suggested a sturdy labor market. These precede the Labor Department's much-anticipated May jobs data, scheduled for release on Friday.
US Manufacturing Sector Sees a Continuous Decline
In a separate development, the U.S. manufacturing sector witnessed a contraction for the seventh consecutive month in May. Nevertheless, after considering various datasets, predictions still favor a 72% chance of a pause in rate hikes at the Fed's June policy meeting.
Market Reaction to Fed Officials' Remarks and Inflation
Comments from Fed officials like governor and vice chair nominee Philip Jefferson, who lean towards a momentary halt in hikes, played a role in shaping the market sentiment. In light of the robust jobs market and high inflation, the Fed's next move remains uncertain.
Meta Platforms Inc Leads Nasdaq, Retail Giants Cut Forecasts
Meta Platforms Inc gave the Nasdaq a lift, adding 2.4%, following the launch of its next-generation mixed reality headset, Quest 3. Conversely, Macy's Inc and Dollar General Corp saw their shares drop by 3.7% and 16.2%, respectively, after both retail giants trimmed their full-year sales forecasts amidst high inflation.
C3.ai Inc Faces a Dip After Revenue Outlook Announcement
Artificial intelligence company C3.ai Inc fell by 17.3% after predicting an annual revenue outlook below street estimates. Advancing issues outpaced decliners by a 1.33-to-1 ratio on the NYSE and a 1.05-to-1 ratio on the Nasdaq.
S&P and Nasdaq Indexes Record New Highs and Lows
Lastly, the S&P index reported two new 52-week highs and 16 new lows, while the Nasdaq recorded 22 new highs and 67 new lows.