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Tuesday, December 5, 2023

Dow futures fall 15 pts; Fed speakers, debt ceiling meeting prompt caution

Dow futures fall 15 pts; Fed speakers, debt ceiling meeting prompt caution
© Reuters.

 

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Investing.com — U.S. stocks are seen opening marginally lower Monday, as investors concentrate on the resumption of key debt ceiling negotiations as comments from Federal Reserve officials.

At 07:00 ET (11:00 GMT), the Dow Futures contract was down 15 points or 0.1%, S&P 500 Futures traded 4 points or 0.1% lower, and Nasdaq 100 Futures dropped 17 points or 0.1%.

U.S. President Joe Biden and House Republican Speaker Kevin McCarthy are set to meet later Monday to resume talks after Republican negotiators surprisingly walked out of negotiations on Friday.

Hopes had been growing last week that the two sides could agree to a deal to raise the $31.4 trillion U.S. debt limit before a June 1 deadline after which U.S. Treasury Secretary Janet Yellen warned that the federal government will struggle to pay its debts.

A U.S. default would likely cause chaos in financial markets, and probably push the global economy into recession.

A number of central bank officials are due to speak later in the session, and investors will study comments from FOMC members James Bullard, Thomas Barkin and Raphael Bostic for clues of future interest rate action by the Federal Reserve.

A series of regional Fed presidents raised market expectations of another hike at the June meeting by stressing last week that inflation was not retreating as quickly as they would have wanted.

However, Fed Chairman Jerome Powell created more uncertainty by hinting at a pause in the U.S. central bank’s rate-hiking cycle on Friday, saying tighter credit conditions mean that “our policy rate may not need to rise as much as it would have otherwise to achieve our goals.”

In the corporate sector, Micron Technology (NASDAQ:MU) stock dropped sharply in premarket trading after China prohibited major local infrastructure operators from purchasing chips made by the U.S. semiconductor firm.

Meta Platforms (NASDAQ:META) stock also retreated after the European Union privacy regulators fined the tech giant $1.3 billion for sending user information to the U.S.

Oil prices stabilized Monday amid caution over the ongoing U.S. debt ceiling talks.

By 07:00 ET, U.S. crude futures traded 0.1% higher at $71.71 a barrel, while the Brent contract rose 0.1% to $75.61.

Both contracts rose around 2% last week, ending four straight weeks of heavy declines on concerns of slowing growth in China, the world’s largest oil importer, as well as the potential economic repercussions of a U.S. default.

Additionally, gold futures fell 0.1% to $1,980.15/oz, while EUR/USD traded 0.1% higher at 1.0822.

Source: Investing.com

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