Around 13:55 GMT, the Dow Jones fell 0.53%, the Nasdaq index gave up 0.13% and the broader S&P 500 index gave up 0.35%.

"The market is disappointed with Home Depot's results," said Quincy Krosby of LPL Financial.

The DIY store chain (-1.49%) reported revenue well below expectations, down 4% year-on-year. Considered one of the barometers of consumption in the United States, the group acknowledged that its sales were "under pressure".

In addition to the deceleration in the housing market, "there is a general deterioration in spending," noted Neil Saunders of GlobalData, "as people reduce their non-essential purchases."

"This is Home Depot's worst quarter in a long time," said Adam Sarhan of 50 Park Investments. "This shows that the consumer may be weaker than previously thought, which would increase the likelihood of a recession by the end of the year."

Added to this were retail sales for April in the United States, which rose by only 0.4%, against 0.8% expected by economists.

These data "suggest that household spending will decelerate in the second quarter," Rubeela Farooqi of High Frequency Economics said in a note.

The picture is nevertheless mixed, as sales excluding automobiles, gasoline, building materials and food did better than expected, with growth of 0.7%, against 0.3% announced.

"The results of Target (Wednesday) and Walmart (Thursday) are going to be important to have a better perception of consumers," said Quincy Krosby, about the two giants of the large distribution.

In the immediate future, Home Depot's communication penalized the entire distribution sector, from direct competitor Lowe's (-1.51%), to Target (-0.26%). Conversely, the e-commerce giant Amazon escaped the movement (+1.21%).

For Quincy Krosby, the direction of the indices is also explained by "concerns related to the negotiations on the debt ceiling".

U.S. President Joe Biden is scheduled to meet Tuesday with opposition congressional leaders, including Republican House Speaker Kevin McCarthy, to try to find a compromise. But the latter said on Monday that the two sides still had positions "far apart" from each other.

In a sign that the political crisis is beginning to have a concrete impact on the market, the one-month US Treasury yield reached its highest level in at least twenty years on Tuesday, at 5.57%. Treasury Secretary Janet Yellen reiterated Monday that the United States could be forced to default on its debt as early as early June in the absence of an agreement.

On longer maturities, bond yields rose slightly. The yield on 10-year US government bonds stood at 3.54%, compared to 3.50% the previous day at the close.

On the stock exchange, the laboratory Horizon Therapeutics (-18.19%) was weighed down by information from the Bloomberg agency, according to which the US Competition Authority, the FTC, is preparing to take legal action to block its acquisition by the biotech Amgen (-0.78%). The transaction was announced in December for $27.8 billion.

The online bank Capital One (+4.14%) benefited from the acquisition of a stake by Berkshire Hathaway, the holding company of Warren Buffett, which bought nearly a billion dollars of securities of the McLean group (Virginia) in the first quarter.

© 2023 AFP