NEW YORK (Barrons) - U.S. stock futures edged lower early Monday ahead of a crucial week for debt ceiling negotiations.
Futures on the Dow Jones Industrial Average fell 8 points, while S&P 500 futures fell 0.1% and Nasdaq-100 futures declined 0.2%.
With just over a week to go to the estimated June 1 deadline for raising the debt limit, President Joe Biden will meet with House Speaker Kevin McCarthy (R., Calif) in a bid to break the deadlock between the two sides.
All three major U.S. indexes closed lower Friday to end a strong week after Republicans walked out of debt limit talks with the White House. A phone call between Biden and McCarthy Sunday appeared more positive but Monday’s meeting will be closely watched by markets as the deadline fast approaches.
“An avoidance of a default is still the markets’ baseline view even accounting for Friday’s late drop in U.S. markets, which took some of the gloss off a very positive week for global stock markets,” CMC Markets analyst Michael Hewson said.
European markets were also a little higher, buoyed by hopes of a U.S. debt deal. The Stoxx 600 Index was 0.2% up, and the U.K.’s FTSE 100 rose 0.3% in early trading.
The minutes from the Federal Reserve’s May meeting, due to be released Wednesday, will also be in focus for insight into where the central bank might go next with interest rates.
The odds of a hike in June have fallen in recent days as the uncertainty over the debt ceiling has mounted, with traders now seeing a 17% chance of a 25 basis-point hike, down from 20% a week ago, according to the CME’s FedWatch tool.