STORY: Wall Street's main indexes ended lower on Wednesday as more high-stakes talks between the White House and congressional Republicans still failed to produce a deal on lifting the U.S. debt ceiling.
The Dow and S&P 500 each shed roughly three-quarters of a percent, while the Nasdaq lost six-tenths of a percent.
Washington’s lack of progress in raising the government's $31.4 trillion debt limit has put investors on edge and roiled markets – with the risk of a government default looming large ahead of a June 1 deadline.
But while many are bracing for a potentially cataclysmic default, Adam Coons, Chief Portfolio Manager at Winthrop Capital Management, sees the moment as a buying opportunity for beaten-down stocks.
“We think that the narrative around banks has gotten a little bit too negative... so we are selective, but we do like certain regional banks - for example, Regions, KeyCorp. These are banks that do have a good deposit base, and we see that their asset-liability matching looks favorable to weather any deposit outflows.”
Federal Reserve policy was also in focus. Minutes released from the central bank’s meeting in early May showed that Fed officials "generally agreed" last month that the need for further interest rate increases "had become less certain."
Investors expect the central bank to pause its aggressive rate hiking campaign at its next meeting in mid-June.
In company news, Citigroup shares fell 3.1% as the bank scrapped a $7 billion sale of its Mexican consumer unit Banamex and will list it instead.
Shares of Abercrombie & Fitch soared more than 31% after the retailer posted a surprise quarterly profit and lifted its full-year sales forecast.
And fellow retailer Kohl’s gained 7.5% after it also reported a surprise profit and maintained its full-year targets despite a drop in quarterly comparable store sales.