Wall Street Down As Debt Worries Loom

US stock indexes closed lower on Tuesday as investors grew more cautious ahead of a US consumer price index report and a meeting between political leaders to discuss the debt ceiling.

Investors will look for clues on whether inflation is continuing to ease following the Labor Department's consumer price index (CPI) report on Wednesday.

Talks over the US debt ceiling are adding to caution in the market as traders were also waiting for an update on plans for the debt ceiling from a meeting between US President Joe Biden, Republican House Speaker Kevin McCarthy and other congressional leaders at the White House.

Worries of a potential government default loom over Washington as early as June 1, if Congress does not act to resolve the deadlock.

"Overall, it's a relatively mild day, but both the debt ceiling as well as the inflation are causing some anxiety," said Randy Frederick, managing director of trading and derivatives at the Schwab Center for Financial Research.

The Dow Jones Industrial Average fell 0.17 percent, to 33,562, the S&P 500 lost 0.46 percent, to 4,119 and the Nasdaq Composite dropped 0.63 percent, to 12,180.

Disappointing forecasts from companies such as PayPal and Apple supplier Skyworks also weighed on the mood. They were down 12.73 percent and 5.15 percent, respectively.

Shares of PayPal Holdings dropped and pressured the benchmark S&P 500 after the company cut its margin forecast. The stock was also among the top drags on the Nasdaq.

Skyworks Solutions shares slid after the company forecast current-quarter revenue and earnings below estimates.

"Companies have generally been beating earnings expectations, but earnings season is always choppy, and today we have some weaker results. That's weighing a bit on the market," said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.

Boeing rose 2.34 percent after budget carrier Ryanair Holdings placed a multi-billion US dollar order for Boeing jets.

Novavax surged 27.79 percent as the drugmaker planned a 25 percent cut to its global workforce. (Reuters)