U.S. stock index futures rose Wednesday as investors hoped congressional leaders and President Joe Biden could come to a deal on the U.S. debt ceiling and avoid a catastrophic debt default. Futures tied to the Dow Jones Industrial Average added 133 points, or 0.4%. S&P 500 futures and Nasdaq-100 futures gained 0.4% and 0.2%, respectively. At the conclusion of a meeting between the president and congressional leaders Tuesday, House Speaker Kevin McCarthy said that a “better process” is now in place for further talks, saying it’s “possible to get a deal by the end of the week.” The White House said that Biden canceled a second leg of an upcoming international trip to focus on the negotiations. “Now we have a structure to find a way to come to a conclusion,” McCarthy told CNBC’s “Squawk Box” on Wednesday. “I think at the end of the day we do not have a debt default. I think we finally got the president to agree to negotiate.” Concerns over a potential default has weighed on markets recently. The Dow is down more than 3% this month, including a 1% decline on Tuesday. Tuesday’s “meeting between President Biden and House Speaker McCarthy went as well as could have reasonably been hoped for,” wrote Citi chief U.S. economist Andrew Hollenhorst, in a note. “We continue to expect a long-term debt ceiling deal.” Treasury Secretary Janet Yellen has said government needs to raise the limit immediately as the country faces the possibility of defaulting as early as June 1. Regional bank shares rebounded on Wednesday, helping market sentiment, as Western Alliance Bancorp detailed improving deposit growth. The SPDR S&P Regional Bank ETF jumped 2%, while Western Alliance soared 11% in early trading. Asia-Pacific markets were mixed as investors digested economic data from Japan and Australia. Hong Kong’s stocks saw a sharp sell-off in its final hours of trade, with Hang Seng index trading nearly 2% lower in Wednesday’s afternoon session. Healthcare, real estate, and consumer cyclical stocks led declines, Refinitiv data showed. Investors further digested China’s new home prices that fell 0.2% year-on-year in April. Mainland China stocks also fell, with the Shanghai Composite ticking 0.21% lower, ending at 3,284.23 and the Shenzhen Component seeing marginal declines to close at 11,091.08. Japan’s Nikkei 225 was up 0.84% – exceeding the psychological level of 30,000 and closing at 30,093.59. The Topix was up 0.3% and closed at 2,133.61, as Japan stocks surged to the highest since August 1990. South Korea’s Kospi rose 0.58% and finished at 2,492.66, while the Kosdaq jumped 2.14% to end the day at 834.19. In Australia, the S&P/ASX 200 closed 0.49% lower at 7,199.2, with mining stocks leading the losses. Oil prices rose Wednesday even after a surprise rise in U.S. crude inventories stoked demand concerns as economic worries competed with a tighter supply outlook for later in the year. Brent crude futures rose 44 cents, or 0.6%, to $75.35 a barrel. West Texas Intermediate U.S. crude was up 41 cents at $71.27. Gold prices steadied on Wednesday with gains capped by a firmer dollar, as investors fretted over prolonged U.S. debt-limit negotiations. Spot gold was little changed at $1,987.65 per ounce. U.S. gold futures steadied at $1,991.60.
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