Stock Market News

Wall St set to open lower ahead of debt ceiling deal vote

2023.05.31 09:33


© Reuters. FILE PHOTO: Fearless Girl is seen outside the New York Stock Exchange (NYSE) in New York City, U.S., May 30, 2023. REUTERS/Brendan McDermid

By Shreyashi Sanyal

(Reuters) – U.S. stock indexes were set to open lower on Wednesday as a deal to raise the nation’s debt ceiling headed for a pivotal vote by lawmakers, while another round of earnings highlighted the pinch of higher prices being felt by corporate America.

A bill to lift the $31.4 trillion U.S. debt ceiling and achieve new federal spending cuts made its way to the House of Representatives for debate on Tuesday and an expected vote on passage is due later on Wednesday.

House passage would send the bill to the Senate, where debate could stretch to the weekend, as a June 5 deadline loomed.

“All signs point to the deal getting done but there’s headlines about some Congress people who are against it,” said Joe Saluzzi, co-manager of trading at Themis Trading. “Until that deal gets done, there will be a little bit of nervousness.”

The debt ceiling debate has been an overhang for financial markets, but signs of progress have pushed the and the Nasdaq indexes toward monthly gains in May. The Nasdaq was on track for its best performance in May since 2020, rising 6.5%.

Investors now await the Labor Department’s closely watched jobs report for May, due on Friday, which could show how resilient the economy has been to high interest rates and inflation.

At 8:34 a.m. ET, were down 99 points, or 0.3%, were down 18.5 points, or 0.44%, and were down 67 points, or 0.47%.

Overnight, a report showed Federal Reserve Bank of Cleveland President Loretta Mester said she sees no “compelling” reason to pause rate hikes.

Traders are pricing in a 61% chance of a 25-basis point increase at the Fed’s June 13-14 meeting. [FEDWATCH]

Chicago purchasing managers’ index (PMI) data is due later in the day, as is the Job Openings and Labor Turnover Survey (JOLTS) for April.

Advance Auto Parts (NYSE:) Inc slumped 28.8% premarket after the auto parts retailer cut its full-year forecasts.

HP Inc (NYSE:) dropped 5.6% after it missed quarterly revenue estimates, as inflation-hit customers spent less on the company’s personal computers.

Shares of Hewlett Packard Enterprise (NYSE:) Co slipped 8.7% as it also missed Wall Street estimates for second-quarter revenue.

Nvidia (NASDAQ:) Corp’s shares fell 1.8% a day after hitting a record high and briefly joined an elite club of U.S. companies sporting a $1 trillion market value.

Other chipmakers including Advanced Micro Devices (NASDAQ:) Inc, Micron Technology Inc (NASDAQ:) and Intel Corp (NASDAQ:) shed between 0.9% and 3.8%.

Separately, chip company Ambarella (NASDAQ:) Inc tumbled 18.5% after forecasting second-quarter revenue below estimates.

American Airlines (NASDAQ:) Group Inc added 2.1% after raising its second-quarter profit outlook.

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