Stocks drop with forecast of interest hikes, US government debt default 

Stocks are slipping today as Wall Street waits for the Federal Reserve’s latest move on interest rates and watches Washington edge closer to a default on U.S. government debt, according to the Associated Press. 

The S&P 500 was 0.4% lower in early trading. The Dow Jones Industrial Average was down 135 points, or 0.4%, at 33,916, as of 9:50 a.m. eastern time, while the Nasdaq composite was 0.2% lower. Arista Networks fell 12%, despite reporting better profit and revenue than expected.  

Conversely, Molson Coors Beverage reported adjusted earnings that more than doubled analysts’ expectations, jumping 7%. Marriott International rose 4.9%, also beating profit forecasts. 

The biggest question on Wall Street remains what the Fed will do as it begins a two-day meeting on interest rates. The widespread assumption is that it will raise rates on Wednesday by another quarter of a percentage point.  

The Fed has raised interest rates at a furious pace from early last year, up to a range of 4.75% to 5% from virtually zero to stem inflation. Many traders are hoping the Fed will halt its rate hikes and perhaps even cut them later this year to offer the market more breathing room, and stocks have historically done well in the months immediately following the last rate hike. 

Adding cause for concern, Treasury Secretary Janet Yellen said late Monday that the U.S. government could default on its debt by June 1, earlier than previously thought, unless Washington allows it to borrow more.