Wall St set to open flat amid debt limit talks; Micron slides

By Shreyashi Sanyal and Shristi Achar A

(Reuters) – U.S. stock indexes were set to open flat on Monday as markets awaited updates on lawmakers’ talks about raising the U.S. debt ceiling, while shares of Micron fell following China’s ban on its memory chips.

Hopes that a deal would be struck sometime over the weekend to raise the $31.4 trillion U.S. debt limit helped Wall Street’s main indexes end the last week with gains, even as discussions almost fell apart on Friday.

President Joe Biden and House Republican Speaker Kevin McCarthy will meet for talks on Monday, with less than two weeks before a deadline after which the Treasury warned that the federal government will struggle to pay its debts.

A default would cause chaos in financial markets and spike interest rates.

“Everybody is paying attention to this Kevin McCarthy-Joe Biden meeting, waiting for some kind of signal as far as the debt ceiling is concerned,” said Robert Pavlik, senior portfolio manager at Dakota Wealth.

“People are just waiting and watching to see how this plays out.”

In a move that was perceived as ramping up trade tensions between Beijing and Washington, China barred chipmaker Micron Technology Inc (NASDAQ:) from selling memory chips to key domestic industries, sending its shares down 4.0% in premarket trading.

Shares of other semiconductor companies also fell, with Intel Corp (NASDAQ:), Nvidia (NASDAQ:) Corp and Advanced Micro Devices (NASDAQ:) Inc down between 0.2% and 1.1%.

Apple Inc (NASDAQ:) fell 0.9% after a report that Loop Capital downgraded the iPhone maker’s stock to “hold” from “buy”. This marked its first rating cut in five months, according to Refinitiv data.

At 8:33 a.m. ET, were up 31 points, or 0.09%, were up 3.5 points, or 0.08%, and were up 3 points, or 0.02%.

Investors will look for clues on the monetary policy path from a slew of Federal Reserve speakers later in the day, ahead of key data points this week such as the April personal consumption expenditure (PCE) index and durable goods.

The PCE index reading, considered to be the Fed’s preferred inflation gauge, is due on Friday.

Minneapolis Fed President Neel Kashkari said it was a “close call” on whether he would vote to raise rates at the Fed’s June meeting or take a pause and leave rates where they are.

Meta Platforms Inc (NASDAQ:) slipped 0.5% after the European Union privacy regulators slapped a $1.3 billion fine on the company for sending user information to the United States.

Chevron Corp (NYSE:) dipped 0.7% as the oil major said it would acquire PDC Energy (NASDAQ:) Inc in an all-stock transaction for $7.6 billion, including debt.

PacWest Bancorp rose 8.6% after the regional lender entered into an agreement to sell a portfolio of 74 real estate construction loans to a subsidiary of Kennedy-Wilson (NYSE:) Holdings Inc.

Shares of other regional lenders also gained, with Zions Bancorp, KeyCorp (NYSE:) and Western Alliance (NYSE:) Bancorp up between 1.3% and 3.1%.