Stock futures slide focus on debt talks, Fed minutes

US stock markets opened lower on Wednesday morning as investors fretted over US debt defaults and prepared for the release of minutes from the Federal Reserve’s last policy meeting.

The S&P 500 (^GSPC) fell 0.49%, while the Dow Jones Industrial Average (^DJI) fell 0.32%, or more than 100 points. The tech-heavy Nasdaq Composite ( ^IXIC ) fell 0.62%.

Among Treasuries, the yield on the benchmark 10-year note was lower at 3.68%, while the two-year yield was at 4.29%. And those on the 30-year bond fell to 3.93%.

The impasse in Washington’s debt ceiling negotiations is turning out to be longer than expected. Speaker Kevin McCarthy reportedly told his Republican colleagues, “We’re nowhere near a deal,” as he left Tuesday’s meeting. A few hours ago, he said in the Oval Office:”I think, at the end of the day, we can find common ground.”

Meanwhile, A Upper McCarthy Lt No further meetings are scheduled, according to Bloomberg. The debt ceiling impasse has sparked some concern among investors who have sought haven assets.

Few believe the House and Senate could vote on a deal next week, just hours before Treasury Secretary Janet Yellen’s June 1 “ex-date” deadline.

“There are real concerns that this could go down to the wire, and investors are slowly preparing accordingly,” Jim Reed and colleagues at Deutsche Bank wrote to clients.

“There’s also talk of whether a short-term extension will be needed now to get through this, but for now, Speaker McCarthy has downplayed the likelihood of a continuation. So investors are still waiting nervously with no sign of a deal emerging,” Reid added.

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Investors are focused on the release of Federal Open Market Committee minutes on Wednesday afternoon. Comments from policymakers could shed light on how seriously the Fed is considering keeping interest rates steady, and reveal whether any FOMC members are leaning toward a pause.

Elsewhere, stocks face pressure on China’s economic recovery, and escalating US-China chip tensions could mean further uncertainty.

Among the single stock moves, Palo Alto Networks, Inc. ( PANW ) shares advanced more than 4% after the company reported third-quarter adjusted earnings that came in above analysts’ expectations. The cyber security firm has raised its profit and revenue guidance for the year.

Toll Brothers, Inc. ( TOL ) shares gained more than 3% after the homebuilder’s quarterly profit and earnings beat expectations as mortgage rates held steady and improved buyer confidence picked up.

Shares of Pacwest Bancorp ( PACW ) rose more than 4% after selling its real estate lending arm.

On the revenue front, Abercrombie & Fitch (ANF), BMO (BMOElf Beauty (ELF), Coles (KSS), Nvidia (NVDA), Petco (WOOF), Red Robin (RRGB), snowflake (Snow) are on deck Wednesday.


Danny Romero is a Yahoo Finance reporter. Follow her on Twitter @daniromerotv

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