Stock Market Today: US Futures Mixed as US Debt Concerns Remain; Germany is slipping into recession

Trading on Wall Street was mixed early Thursday as markets looked for signs of progress on a deal to avert a default on US government debt.

Futures for the Dow were down 0.3% and the S&P 500 was up 0.6%.

Nasdaq composite futures were up 1.8%, boosted by Nvidia, whose shares rose about 28% in premarket after the chipmaker forecast a huge revenue increase for the next quarter, mainly due to demand for chips for AI-related products and services. Nvidia said it expected revenue of $11 billion in the current quarter, compared to $6.7 billion in the second quarter a year ago.

The U.S. government could run out of money to pay its bills by June 1 unless Congress allows it to borrow more. The widespread belief on Wall Street is that Congress will reach a deal at the 11th hour, as it has done several times before, because a default would benefit no one and could cause massive disruptions to the economy and financial markets.

As the early June deadline approaches, only a concrete resolution can give markets much-needed conviction rather than verbal reassurance, with lingering risks of a prolonged deadlock still keeping sentiment on a cautious note, IG’s Yeap Jun Rong said in a comment.

The stock market has remained largely resilient. The fear has so far centered on the bond market, where Treasury prices have fallen due to the payout around the date of a possible default.

Interest rates are so high because the Federal Reserve has been raising them at its fastest pace in decades to try to control inflation. Minutes from the last Federal Reserves meeting showed that policymakers are divided on whether or not to raise interest rates.

Traders are hoping there is only one more hike coming this summer, if any. Federal Reserve officials were split earlier this month on whether or not to pause their rate hikes at their upcoming meeting in June, according to the minutes of their last meeting.

European markets declined as Germany slipped into recession after the economy contracted by 0.3% in the first quarter of the year. The data from the Federal Bureau of Statistics showed a second quarter of contraction, which is a definition of recession.

The figures were a blow to the German government, which last month boldly doubled its growth forecast for this year after a feared winter energy crisis failed to materialize.

In Frankfurt, the DAX lost 0.2%, while the CAC 40 in Paris and the UK FTSE lost 0.3% each.

Tokyo was one of the few markets to move forward. Investors have been betting on higher returns from Japanese companies, taking advantage of the dollar’s strength against the Japanese yen.

The benchmark Nikkei 225 index rose 0.4% to 30,801.13.

Hong Kong’s Hang Seng fell 1.9% to 18,746.92 on concerns about China’s economic recovery after the government eased pandemic restrictions late last year, losing momentum. The Shanghai Composite index fell 0.1% to 3,201.26.

Ongoing tensions between China and the United States over technology and security have made markets in the region even more uncertain.

In Seoul, the Kospi lost 0.5% to 2,554.69, while the Australian S&P/ASX 200 lost 1.1% to 7,138.20. Sensex from India fell 0.4%.

The Taiwanese benchmark Taiex rose 0.8% on gains for major computer chip makers. Taiwan Semiconductor Manufacturing Co., the world’s largest, rose 3.4%.

On another trading Thursday, benchmark US crude fell $1.49 to $72.85 a barrel in electronic trading on the New York Mercantile Exchange. It gained $1.43 to $74.34 a barrel on Wednesday.

Brent crude, the standard for international trade, fell $1.38 to $76.85 a barrel.

The US dollar rose to 139.58 yen. The euro fell from $1.0754 to $1.0729.

On Wednesday, the S&P 500 lost 0.7%, the Dow fell 0.8% and the Nasdaq composite lost 0.6%.

Kurtenbach reported from Bangkok; Ott reported from Silver Spring, Md.