U.S. stock index futures dipped Tuesday as investors digested a lackluster forecast from Home Depot, and turned their attention to a meeting between congressional leaders and President Joe Biden on the U.S. debt ceiling. Futures tied to the S&P 500 traded 0.27% lower, while Nasdaq 100 futures fell 0.21%. Futures linked to the Dow Jones Industrial Average lost 107 points, or 0.32%. Dow member Home Depot pulled back by 4.4% after the home improvement retailer reported disappointing quarterly revenue and cut its full-year guidance. Meanwhile, April retail sales rose 0.4% last month, lower than the 0.8% increase anticipated by economists polled by Dow Jones. Investors are anxiously awaiting progress on a deal to raise the debt ceiling before June 1, which is the earliest date the Treasury Department has said the U.S. could default on its debt obligations. Treasury Secretary Janet Yellen said last week that a lack of a deal could spur an “economic catastrophe.” On Monday, Yellen reaffirmed that the U.S. faced the possibility of default as early June 1, the so-called X date, if a deal isn’t reached between the White House and Congress. “Waiting until the last minute to suspend or increase the debt limit can cause serious harm to business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States,” Yellen said. “In fact, we have already seen Treasury’s borrowing costs increase substantially for securities maturing in early June,” she added. Biden maintained a more optimistic view of the ongoing negotiations over the weekend, while House Speaker Kevin McCarthy, R-Calif., said significant obstacles still remain. Biden has so far maintained that raising the debt ceiling is non-negotiable. McCarthy, however, has pushed for talks to broker a deal to raise the debt ceiling be tied to spending cuts. “We worry the stock market is not adequately pricing in the risk of a failure of the Democrats and Republicans to reach an agreement to raise the debt ceiling, which would be catastrophic for the US economy,” Loop Capital’s Anthony Chukumba wrote in a Tuesday note. Asia-Pacific markets are trading mixed as investors digest key economic releases from China that missed estimates despite market expectations of a further rebound growth. Mainland China markets fell, with the Shanghai Composite 0.6% lower and ending the day at 3,290.98, while the Shenzhen Component slid 0.71% to close at 11,099.26. Hong Kong’s Hang Seng index climbed 0.82%. Japanese stocks rose, with the Nikkei 225 up 0.73% and closing at 29,842.99. The Topix was 0.58% higher and ended at 2127.18, hitting its highest level since August 1990. South Korea’s Kospi advanced 0.04% and closed at 2,480.24, and the Kosdaq also saw gains, climbing 0.27% to finish at 816.75 while Australia’s S&P/ASX 200 slipped 0.45% to end at 7,234.7. Oil futures steadied on Tuesday as support from a higher global demand forecast from the International Energy Agency (IEA) was countered by weaker than expected Chinese economic data. Brent crude futures last eased by 6 cents, or 0.09%, to $75.16 a barrel while U.S. West Texas Intermediate crude was down 2 cents, or 0.03%, at $71.09. Both benchmarks rose more than 1% on Monday, reversing a three-session losing streak. Gold prices dropped on Tuesday after U.S. central bank officials indicated they expect interest rates to stay high, while investors looked ahead to a key meeting for the outcome of debt-ceiling negotiations in Washington. Spot gold was down 0.75% at $2,005.39 per ounce, while U.S. gold futures fell 0.64% to $2,009.80.
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