Wall Street floats in a tight range as talks about avoiding US bankruptcy continue

Dow and S&P futures rose less than 0.1% before the bell.

A pivotal meeting is scheduled for later today at the White House between President Joe Biden and House Speaker Kevin McCarthy about the debt ceiling. A default on US debt would almost certainly trigger a recession in the US economy, with damaging consequences for economies worldwide.

It seems quite likely that a full deal will be reached before early June, but the timing is hard to predict, Stephen Innes, managing partner at SPI Asset Management, said of the US’s efforts to avoid a potentially disastrous bankruptcy of their avoid guilt.

While bargaining strategy and political incentives imply a last-minute deal, we’ll soon find out whether it’s baked beans or lobster over the Memorial Day holiday.

The White House and Republicans in the House of Representatives completed another round of talks over the weekend.

Washington must negotiate a budget compromise along with a deal to raise the country’s borrowing limit to avoid a federal default. Democrats and Republicans face a deadline of June 1, the date the U.S. government will run out of money to pay its bills unless Congress allows it to borrow more.

On the upside, US Federal Reserve Chairman Jerome Powell made remarks on Friday indicating that the Fed could leave interest rates alone at its next meeting in June.

Most companies in the S&P 500 reported higher earnings than analysts had expected for the start of the year. But they are still on track to report profit declines from a year ago level for the second consecutive quarter.

Facebook parent company Meta lost 1.4% in premarket trading after the European Union fined the social media giant a record $1.3 billion on Monday. The EU ordered Meta to stop transferring user data across the Atlantic by October, the latest salvo in a decade-long case sparked by fears of cybersnooping in the US.

Meta, which had previously warned that services could be discontinued for its users in Europe, vowed to appeal and ask the courts to immediately suspend the decision.

Shares of Micron fell more than 4% in premarket after the Chinese government on Sunday told users of computing devices deemed sensitive to stop buying products from the largest U.S. memory chipmaker. Micron products have unspecified serious network security risks that threaten China’s information infrastructure and affect national security, the Cyberspace Administration of China said on its website.

In Japan, data on machine orders in March, released Monday, pointed to a slowdown in the world’s third-largest economy, with the leading indicator falling 3.9% for the second straight month of declines. But analysts think a recovery is on the way this quarter as domestic production gradually recovers from the various negative effects of the pandemic.

The Japanese benchmark Nikkei 225 gained 0.9% to close at 31,086.82. The Australian S&P/ASX 200 fell 0.2% to 7,263.30. The South Korean Kospi won 0.8% to 2,557.08. The Hong Kong Hang Seng rose 1.2% to 19,678.17, while the Shanghai Composite rose 0.4% to 3,296.47.

France’s CAC 40 and Germany’s DAX each fell 0.3%, while the UK’s FTSE 100 was unchanged.

In energy trading, benchmark US crude rose 15 cents to $71.70 a barrel. Brent crude, the international standard, gained 22 cents to $75.80 a barrel.

In currency trading, the US dollar rose from 137.88 yen to 138.28 yen. The euro was priced at $1.0824, up from $1.0808.

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Kageyama reported from Tokyo; Ott reported from Silver Spring, Md.