Stocks edge lower on US debt deal anxiety

But rally in major tech stocks pushes US indices higher

The New York Stock Exchange, pictured on Tuesday morning. Wall Street's main indices edged higher in early trading, propelled by hope about the US debt ceiling deal and a rally in tech stocks. Photograph: Michael M Santiago/Getty Images

European stocks edged lower again on Tuesday as relief that the US government had averted a possible default gave way to concern that the deal could face a rocky path through the US Congress.

Despite the initial risk-on sentiment on the deal announced on Saturday, investors also fear now that the agreement was a compromise that could have negative consequences. There is also growing concern that the deal faces a rocky path through the US Congress.

A handful of right-wing Republicans have already said that they will not back the agreement to suspend the debt ceiling. The group includes two hardline conservatives that were appointed to the rules committee – the first hurdle that the legislation will have to clear – by House speaker Kevin McCarthy.

A successful vote there would set up a vote by the full House on Wednesday with a Senate vote likely to stretch on into the weekend.



The Iseq index fell 1.2 per cent, broadly in line with its European peers, on a quiet trading day characterised by middling volumes.

Irish banks were among the biggest losers on the session with AIB down 4.8 per cent to €3.68 and Bank of Ireland off by 4.5 per cent to €8.58 per share. Traders in Dublin said there no specific news affected the stock although European banks were weaker generally on the session, albeit stronger than their Irish peers.

CRH remained unchanged at €44.84 as investors waited for more clarity around the terms of the US debt ceiling deal.

Greencore, one of the only Irish names to publish results on Tuesday, added 4.5 per cent in London after surprising investors by sticking to its full-year earnings guidance.


London’s blue-chip FTSE 100 index slipped 1.4 per cent on Tuesday as falling crude prices dragged oil majors lower and consumer staples declined on rising recession risks.

BP and Shell fell by 2 per cent and 2.9 per cent respectively after oil futures reversed some of last week’s gains. With the US debt ceiling deadline in effect coinciding with the next meeting of the Organisation of the Petroleum Exporting Countries and allies including Russia, known as Opec+, on June 5th, concerns about future US demand and the prospect of further output cuts were to the fore.

Retail tech company Ocado was the worst performer of the session, down more than 3.2 per cent while other food-related companies, including Unilever, were also weak.

Shares in aerospace and defence giant Rolls-Royce tumbled by more than 3 per cent after the Indian government filed a legal action against the company alleging “criminal conspiracy” in the procurement and licensed manufacturing of 123 advanced jet trainers.


The pan-European Stoxx 600 index was off by almost 1 per cent while the blue-chip Stoxx 50 fell by more than 0.6 per cent.

Drinks companies were in the firing line with Jameson maker Pernod Ricard slipping by 2.9 per cent on the news that the group’s UK managing director, David Haworth, will step down later this year after more than three decades with the company.

Budweiser-maker Anheuser-Busch fell by more than 3 per cent after the group told US wholesalers that it plans to focus on its “mega brands”, potentially signalling a move to discontinue some of its smaller brands.

Moving in the opposite direction, shares in bailed-out German gas supplier Uniper soared more than 14 per cent after reporting that it now expects strong earnings recovery and no additional losses related to the replacement of Russian gas volumes.

New York

A rally in some of the world’s largest technology companies drove gains in US stocks as Treasury yields fell on hopes that Congress will pass a debt-ceiling deal to head off a default.

The artificial-intelligence hype continued to fuel appetite for tech shares, with the Nasdaq 100 climbing for a third straight session and heading toward one of its best first five months of a year in the past quarter century.

The S&P 500, meanwhile, added 0.3 per cent by closing bell in Dublin while the Dow Jones Industrial Average was essentially flat.

Nvidia became the world’s first chipmaker with a $1 trillion market capitalisation after announcing several AI-related products over the weekend. Tesla, meanwhile, added 3 per cent after Elon Musk joined Apple’s Tim Cook in emphasising the importance of maintaining ties with China in his first visit to the country since before the pandemic. – Additional reporting: Reuters, Bloomberg

Ian Curran

Ian Curran

Ian Curran is a Business reporter with The Irish Times