U.S. stocks sink as investors turn attention to Fed decision, debt ceiling

Investing.com -- U.S. stocks were sinking as investors await the outcome of the Federal Reserve’s two-day meeting, which starts today.

At 11:24 ET (15:24 GMT), the Dow Jones Industrial Average was down 555 points or 1.6%, while the S&P 500 was down 1.7% and the NASDAQ Composite was down 1.5%.

The Fed will announce a decision on interest rates Wednesday afternoon, and then Chair Jerome Powell will take reporters’ questions at a press conference. Investors will be listening for any hints as to the Fed’s thinking heading into the next meeting in June.

Futures traders expect a quarter of a percentage point rate increase tomorrow but a pause in June as the Fed assesses how its actions to date have worked to cool inflation.

Another issue facing the market in the next couple of weeks is the nation’s debt ceiling. Treasury Secretary Janet Yellen said on Monday that based on tax receipts so far, the date when the government risks default is June 1. 

The government hit the $31.4 trillion debt limit in January and has been maneuvering around it since then to keep payments flowing, but it would run out of opportunities to do that on that new date unless Congress raises or suspends the limit.

President Joe Biden invited leaders in the Senate and the House to a meeting on May 9 at the White House.

Job openings for March were lower than expected, at 9.59 million, down from the prior month. Factory orders were also weaker than expected, rising 0.9% versus the 1.1% gain forecasted.

Pfizer Inc's (NYSE:PFE) first-quarter profit beat expectations on solid demand for recently acquired products and pneumococcal vaccines. Shares fell 0.9%.

Uber Technologies Inc (NYSE:UBER) shares rose 8% after forecasting higher than estimated core earnings.

Shares of educational services firm Chegg Inc (NYSE:CHGG) plunged 49.3% on fears that artificial intelligence chatbots could cut into its business.