Wall Street falls amid deadlocked US debt ceiling talks

Wall Street indexes have fallen as talks over increasing the US debt limit stretched to another round, keeping investors jittery on prospects of an unprecedented government default.

White House and congressional Republican negotiators will meet again later on Tuesday to discuss how to raise the $US31.4 trillion ($A47.2 trillion) debt ceiling, with just nine days left for the deadline.

This comes after President Joe Biden and House Speaker Kevin McCarthy could not reach an agreement about the debt ceiling in their meeting a day earlier but vowed to keep talking.

McCarthy said on Tuesday that a debt ceiling deal with the White House was not imminent.

Trading on the S&P 500 index was stuck in a 30-point range in the last two sessions as US debt ceiling talks lingered while a megacaps-led bounce on the Nasdaq helped it close the previous day higher.

“The markets have had some nice rallies over the past weeks and the debt ceiling talks are an excuse to be cautious here,” said Peter Cardillo, chief market economist at Spartan Capital Securities

“The real reason for stalling the advance is the yields that continue to rise.”

Worries over the debt limit pushed yields on one-month Treasury bills to record highs at 5.888 per cent.

Helping limit losses, the S&P Global data showed US business activity rose to a 13-month high in May, lifted by strong growth in the services sector.

The report was the latest indication that the economy held its momentum early in the second quarter despite rising risks of a recession.

The Commerce Department’s April personal consumption expenditure (PCE) index reading, the Fed’s preferred inflation gauge, is due on Friday.

Broadcom Inc advanced 1.3 per cent after the chipmaker entered into a multi-billion-dollar deal with Apple Inc to use chips made in the United States.

Apple shares fell 0.8 per cent.

Among retail earnings, Lowe’s Companies Inc cut its annual comparable sales forecast, as demand dwindles for home improvement goods. Lowe’s reverse coursed to gain 2.4 per cent.

BJ’s Wholesale Club Holdings Inc dropped 6.6 per cent after the warehouse club operator missed first-quarter revenue estimates.

In early trading, the Dow Jones Industrial Average was down 52.83 points, or 0.16 per cent, at 33,233.75, the S&P 500 was down 9.67 points, or 0.23 per cent, at 4,182.96, and the Nasdaq Composite was down 21.97 points, or 0.17 per cent, at 12,698.81.

Zoom Video Communications fell 5.7 per cent after the video conferencing platform recorded its slowest quarterly revenue growth.

Shares of regional lenders extended gains from the previous session, led by a 19.7 per cent rise in PacWest Bancorp.

Western Alliance Bank, Zions Bancorp, KeyCorp and First Horizon Corp rose between 2.0 per cent and 4.6 per cent.

Declining issues outnumbered advancers by a 1.01-to-1 ratio on the NYSE while advancing issues outnumbered decliners by a 1.25-to-1 ratio on the Nasdaq.

The S&P index recorded three new 52-week highs and one new low while the Nasdaq recorded 43 new highs and 31 new lows.