Stock market today: US futures mostly higher ahead of debt ceiling vote, oil falls again

By YURI KAGEYAMA and MATT OTT
AP Business Writers

Wall Street pointed mostly higher early Tuesday after President Joe Biden and House Speaker Kevin McCarthy reached an agreement on a deal to raise the U.S. national debt ceiling.

Futures for the Dow were flat the S&P 500 rose 0.7% before the bell.

Biden and McCarthy are now working to gather votes needed to gain congressional approval in time to avert a default.

Biden spent part of the Memorial Day holiday working the phones, calling lawmakers in both parties, as the president worked to deliver the votes. A number of hard right conservatives are criticizing the deal as falling short of the deep spending cuts they wanted, while liberals decry policy changes such as new work requirements for older Americans in the food aid program.

A key test comes Tuesday afternoon when the House Rules Committee is scheduled to consider the package and vote on sending it to the full House for a vote expected Wednesday.

“I feel very good about it,” Biden told reporters Monday as he left Washington for his home in Delaware.

There are other concerns on top of the threat of the U.S. defaulting on its debt. A key measure of inflation that is closely watched by the Federal Reserve ticked higher than economists expected in April. The persistent pressure from inflation complicates the Fed’s fight against high prices. The central bank has been aggressively raising interest rates since 2022, but recently signaled it will likely forgo a rate hike when it meets in mid-June.

Shares of chipmakers are still rising after Marvell and Nvidia last week posted very strong sales forecasts for AI-related products. Most chipmakers were up more than 3% early Tuesday, lifting the tech-heavy Nasdaq 1.5%.

Markets are also waiting for U.S. consumer confidence data set to be released later Tuesday.

In Europe at midday, Germany’s DAX rose 0.5%, Britain’s FTSE 100 fell 0.5% and France’s CAC 40 shed 0.4%.

In Asian trading, Japan’s benchmark Nikkei 225 rose 0.3% to 31,328.16. Australia’s S&P/ASX 200 edged down 0.1% to 7,209.30. South Korea’s Kospi jumped 1.0% to 2,585.52.

Hong Kong’s Hang Seng gained 0.2% to 18,595.78. The Shanghai Composite gained less than 0.1%, to 3,224.21.

Analysts say investors remain concerned about the a possible “second wave” of COVID-19 cases in China, although the economic impact is expected to be more limited than from the earlier pandemic wave.

China’s recovery from virus-related disruptions during the past several years appears to be faltering, adding to worries over the regional economy.

“To say China’s economic opening has been a disappointment could be an understatement, especially as reflected in local stocks that are now on the cusp of a bear market,” Stephen Innes of SPI Asset Management said in a commentary.

In other trading, U.S. benchmark crude fell 73 cents to $71.94 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, declined $1.05 to $76.05 per barrel.

The U.S. dollar slipped to 139.62 Japanese yen from 140.44 yen. The euro cost $1.0744, up from $1.0711.

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