Markets slide over debt worry

Traders pared bets on a Federal Reserve rate increase in June to 25% as Jerome Powell signaled a pause.

Stocks fell amid a slide in banks and concern U.S. lawmakers are struggling to reach a deal to prevent a default.

The S&P 500 halted a two-day rally, failing to stay above the closely watched level of 4,200, as a Republican representative said bipartisan talks in Washington are on a “pause.”

When asked by reporters about new debt ceiling meetings, House Speaker Kevin McCarthy did not answer the question.

“With the walkout of Republican debt ceiling negotiators hindering chances for a viable conclusion before the upcoming X-date,” that would weaken chances for the Fed to raise rates on June 14,” said Quincy Krosby, chief global strategist at LPL Financial.

The $3.2 billion SPDR S&P Regional Banking exchange-traded fund slumped almost 2% on a news report that Treasury Secretary Janet Yellen told the chiefs of large lenders that more mergers may be needed.

Stocks are primed for a precipitous drop if the U.S. fails to raise the debt limit and delays government payments.

Uber subleases office space

Uber plans to give up about a third of the space at its San Francisco headquarters, adding to a wave of technology companies downsizing in the city.

The ride-hailing company is in the “early stages” of subleasing almost 269,000-square-feet at its home the Mission Bay neighborhood, according to a statement.

Uber said it never occupied the space, which is part of a cluster of four buildings making up the company’s headquarters.

“This will not change our footprint in the city or impact space available for employees,” the company said. “We remain committed to our hybrid work approach, which emphasizes in-person collaboration, and continue to welcome employees to our Mission Bay campus.”

From wire reports