US stock futures edged down ahead of the market open on Tuesday as investors focused on negotiations over the debt-ceiling stalemate, with talks set to resume later in the day.
Contracts on the S&P 500 (^GSPC) edged down 0.12%, while the Dow Jones Industrial Average (^DJI) ticked lower 0.33%. The technology-heavy Nasdaq Composite (^IXIC) was flat.
Wall Street is watching for signs of movement in the debt-ceiling impasse, with a meeting between President Joe Biden and House Speaker Kevin McCarthy set for Tuesday afternoon in Washington.
The meeting comes after Treasury Secretary Janet Yellen sounded the alarm once again on Monday, if Congress has not raised or suspended the debt limit by early next month. She wrote in a letter to lawmakers that “it would cause severe hardship to American families”, with the US potentially defaulting as soon as June 1.
Tuesday’s meeting will include Senate Majority Leader Chuck Schumer, Senate Minority Leader Mitch McConnell and House Democratic Leader Hakeem Jeffries. It follows a White House meeting last week that failed to produce a breakthrough.
Meanwhile, investors will be turning their attention to retail sales data scheduled for release Tuesday morning. Economists surveyed by Bloomberg expect the headline print to grow by 0.8% in April, compared with a 1% drop last month.
Also on Wall Street’s docket are earnings from retailers such as Walmart (WMT) and Target (TGT), along with China’s tech giants Alibaba (BABA) and Tencent (TCEHY).
Home Depot (HD) kicked off, posting first-quarter earnings that mostly missed estimates, while same-store sales came in well below forecasts. The home-improvement giant cut its guidance for fiscal full-year sales growth. Shares dropped more than 4% in pre-market trading Tuesday morning.
Elsewhere, gold edged down, but still held above $2,000. The precious metal has been drawing support as a safe haven as the potential builds for a US debt-ceiling crisis.
“Everyone is extremely confident that a default will not happen but the closer we get to the deadline, the more we’ll see those risks being priced into the markets, which could support gold,” Craig Erlam, senior market analyst, wrote in a note to clients.
Government bond yields were lower. The yield on the US 10-year Treasury note dropped to 3.47%, while the yield on the two-year note fell to 3.98%.
In Washington, former executives from Silicon Valley Bank and Signature Bank are expected to testify before the Senate on Tuesday.
Former Silicon Valley Bank CEO Greg Becker released his prepared remarks. He plans to apologize for the bank’s failure, describing its takeover as “personally and professionally devastating” while noting “I am truly sorry.”
Regional bank stocks were mixed Tuesday morning’s pre-market trading. PacWest Bancorp (PACW) shares were down, while shares Western Alliance Bancorporation (WAL) rose more than 3%.
In single stock moves, Horizon Therapeutics (HZNP) shares sank 17% amid reports the Federal Trade Commission is preparing to file a lawsuit as early as Tuesday to block Amgen’s (AMGN) $27.8 billion deal to buy the drugmaker.
Warren Buffett’s Berkshire Hathaway raised its commitment to Bank of America (BAC) and bought new stock in Capital One (COF), according to filings. COF is up more than 5% Tuesday morning.
Shares of Baidu, Inc. (BIDU) added 1.9% after the Chinese search-engine giant posted first-quarter earnings that beat analysts’ estimates as revenue rose 10%.
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Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv
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Originally published May 16, 2023 at 7:36 AM