us stocks fell tuesday afternoon after an early rally faded as investors weighed news of a debt ceiling deal that needs to quickly pass in congress and technology stock gains driven by the promise of artificial intelligence software against the ongoing question whether more interest rate hikes are coming from the federal reserve on friday the dow jones industrial average rose 329 points or 1 to 33093 the sp 500 index increased 54 points or 13 to 4205 and the nasdaq composite gained 278 points or 219 to 12976 investors are weighing the market implications of the debt ceiling deal reached over the weekend by congress as well as the likelihood of the federal reserve raising its policy interest rate again in june after president joe biden and house speaker kevin mccarthy reached a deal to lift uss debt ceiling over the memorial day weekend investors are now looking at whether they can sell it to their parties quickly by june 5 the federal government exhausts its capacity to pay all its bills treasury secretary janet yellen said last week now the bill emerging from the deal the fiscal responsibility act goes to the house of representatives rules committee on tuesday afternoon the house is expected to vote on the deal wednesday a default could wreak chaos on the market so ed mills washington policy analyst at raymond james says the bill in all likelihood will be passed because the alternative is so bad we continue to believe members who are undecided will be there and vote for this to get it across the finish line he said but averting default is hardly the end of the story he added equally important is the contents of the deal and the market implications and thats where the headwinds may emerge for investors he said theres a glut of treasury bills that will flood the market in the wake of a enacted debt ceiling deal mills noted the issuance could be around 1 trillion through august according to bofa global strategists who buys that mills said  and what are the equity market implications if the money destined for stocks is going to treasury debt instead he added the debt ceiling implications are not the only concerns for traders noted padhraic garvey regional head of research in americas at ing investors are also worried about inflation as the pce index data released last week looked uncomfortably high and that might prompt the federal reserve to raise its key interest rate again garvey said in a phone interview traders are now anticipating another fed rate hike in june fed funds rate traders are pricing in a 65 chance of another 25 basis point increase according to the cme fedwatch tool thats up from a 28 chance one week earlier with the backdrop of fed speak hints at a pause thomas barkin chief of the richmond federal reserve said tuesday that high inflation probably wont dissipate quickly barring a sharper slowdown in the us economy inflation is going to be more stubborn than many people would hope barkin said in an virtual interview sponsored by the national association of business economists investors will also be expecting fridays employment report for may which takes on immense importance as that will be the last major data point that fed officials will have a chance to comment on before their june 14th rate decision said stephen innes managing partner at spi asset management in economic data on tuesday home prices increased in march with fewer listings on the market according to the sp caseshiller home price index meanwhile consumer confidence fell to a sixmonth low in may the conference board said the index fell to 1023 though economists polled by the wall street journal were expecting a read of 99 this content was created by marketwatch which is operated by dow jones  co marketwatch is published independently from dow jones newswires and the wall street journal