The Dow Jones index fell 0.17% to 33,561.81 points, the tech-dominated Nasdaq fell 0.63% to 12,179.55 points. The broader S&P 500 index dropped 0.46% to 4,119.17 points.

The market is taking a "wait-and-see attitude" ahead of Wednesday's release of the consumer price index (CPI) for April, said Steve Sosnick of Interactive Brokers.

"Given the expectations" which are an increase of 0.4% again in the month of April alone, "there is room to be optimistic and see an inflation figure a little better than that," hoped the analyst.

John Williams, president of the New York Fed, did not rule out that a further rate hike was necessary given high inflation. "We did not say that we had finished raising rates," he warned, stressing that the Fed must "keep a restrictive policy in place for some time".

On the political-economic front, the standoff over the US debt ceiling created some anxiety among investors, but less than the media attention suggests.

Congress is currently blocking the borrowing capacity of the United States, demanding drastic cuts in spending while President Joe Biden, so far, has refused to negotiate.

The two sides were scheduled to meet after the market closed for talks at the White House. Without an agreement or moratorium, a US default is possible after June 1, which would cause financial chaos.

This threat, often repeated throughout recent history, has never materialized.

The debt ceiling: a film already seen?

"Of course, the debt ceiling is a concern, but for investors, we've seen this film play before. In general, it ends well," said Steve Sosnick.

"If investors were really worried, the VIX index (which measures market volatility) would be well above 17.5," the analyst said.

On the bond market, ten-year yields were little changed at 3.52% against 3.50% the day before.

On the stock market, the regional banks, still under the worried eye of traders, oscillated between green and red: Pacwest ended in positive territory (+2.35%) but Western Alliance remained in the red (-1.35%).

"The market is not yet ready to give the green light" for the banking sector after several bankruptcies and a trend of flight of deposits, noted the specialist of Interactive Brokers.

Boeing gained 2.33 percent to $201.86 after garnering an order for 300 new Boeing 737-MAX-10 aircraft, for a list price of more than $40 billion from Irish carrier Ryan Air.

Rupert Murdoch's media group Fox Corporation, which recently had to pay $787 million to settle a false information lawsuit, ultimately gave up 1.49%. Its quarterly results were better than expected, with revenue climbing 18% to $4.08 billion.

Data analytics firm Palantir soared 23.26 percent to $9.54 after reporting better-than-expected quarterly results while management reported "unprecedented demand" for its intelligence that is expected to benefit from the support of artificial intelligence.

Electric vehicle maker Lucid lost 5.58 percent as sales fell from the previous quarter.

Airbnb posted 20% revenue growth in the first quarter, better than expected, but puts its guidance for the second quarter in a slightly less optimistic range than analysts. The share of the rental of furnished tourists, which had jumped Monday, gave up 9.70% in electronic trading after the close.

© 2023 AFP