US stock futures rose on Tuesday night as investors kept an eye on debt ceiling negotiations.
Futures linked to the Dow Jones Industrial Average rose 37 points, or 0.1%. S&P 500 futures and Nasdaq 100 futures each rose 0.1%.
The three major cuts fell short normal trading Tuesday. The S&P 500 lost 1.12%, while Nasdaq Composite and that Dow Jones Industrial Average fell 1.26% and 0.69% respectively.
Treasury Secretary Janet Yellen previously warned lawmakers that a potential default in early June is “highly likely”. House Speaker Kevin McCarthy said he had a “productive” discussion with President Joe Biden Monday. Nonetheless, there were few indicators of progress in the negotiations on Tuesday.
Even if Washington officials were to raise the debt ceiling, however, markets could fall, according to Bill Merz, director of capital markets research at US Bank Wealth Management. That’s because the Treasury will need to issue a lot of debt to fill its general account, he said.
“The effect of that is likely to take liquidity out of the broader capital markets,” Merz said. “Especially recently, (it) has really overlapped with, or it has correlated with, the S&P 500 in public equity performance,” he continued
“Especially recently, (it) has really overlapped with, or it’s correlated with, the S&P 500 in public equity performance,” he continued.
On the economic front, investors will be watching for the minutes from the Federal Reserve’s meeting earlier in May. They will be released on Wednesday afternoon.
Investors will also be looking toward more earnings announcements. Clothing retailer American Eagle Outfitters and the semiconductor giant Nvidia will post their results on Wednesday after the clock.