U.S. stock index futures fell slightly Wednesday as investors kept an eye on debt ceiling negotiations. Futures linked to the Dow Jones Industrial Average fell by 90 points, or 0.3%. S&P 500 futures and Nasdaq-100 futures declined 0.3% each. Negotiators for both sides were expected to meet again Wednesday morning, according to Reuters. Treasury Secretary Janet Yellen previously warned lawmakers that a potential default in early June is “highly likely.” House Speaker Kevin McCarthy said he had a “productive” discussion with President Joe Biden on Monday. Nonetheless, there were few indicators of progress made in negotiations on Tuesday. Even if Washington’s officials were to raise the debt ceiling, however, markets could be roiled, according to Bill Merz, head of capital markets research at U.S. Bank Wealth Management. That’s because the Treasury will need to issue a lot of debt to replenish its general account, he said. “The impact of that is likely to remove liquidity from the broader capital markets,” Merz said. “Especially more recently, [that] has really overlapped with, or it has correlated with, S&P 500 in general stock performance,” he continued. “Especially more recently, [that] has really overlapped with, or it has correlated with, the S&P 500 in general stock performance,” Merz said. On the economic front, investors will be watching for the minutes from the Federal Reserve’s meeting earlier in May. They will be released Wednesday afternoon. Investors will also be looking toward more earnings announcements. Clothing retailer American Eagle Outfitters and semiconductor giant Nvidia will be posting their results Wednesday after the bell. The three major averages fell during Tuesday. The S&P 500 lost 1.12%, while the Nasdaq Composite and the Dow Jones Industrial Average declined 1.26% and 0.69%, respectively. Asia-Pacific markets slid Wednesday, with the Shanghai Composite ending down 1.28% at 3,204.75, its lowest level since Jan 13. The Shenzhen Component closed 0.84% lower at 10,920, erasing all its gains this year to sink to lowest since Dec 23 last year. Hong Kong’s Hang Seng index posted a second-straight daily loss, closing down 1.77% at 19,087, while the Hang Seng Tech index shed 2.1%. In Japan, the Nikkei 225 also posted a second-straight daily loss, closing down 0.89% at 30,682.68 and the Topix ended down 0.42% at 2,152.4, even as the country’s business sentiment among manufacturers turned positive for the first time in 2023, according to a Reuters Tankan survey. South Korea’s Kospi snapped a seven-day winning streak to close flat on the day at 2,567.45, while the Kosdaq ended down 0.43% at 855.46. In Australia, the S&P/ASX 200 was down 0.63% at 7,213.8, its lowest closing level since last Wednesday. Oil prices rose on Wednesday after data showed U.S. inventories and fuel supplies tightening and following a warning from the Saudi energy minister to speculators raised the prospect of further OPEC+ output cuts. Brent crude futures rose $1.42, or 1.9%, to $78.26 a barrel, while U.S. West Texas Intermediate crude (WTI) gained $1.48, or 2%, to $74.40 a barrel. Saudi Arabia’s energy minister said short sellers – those betting that prices will fall – should “watch out” for pain. Gold prices moved in a narrow range on Wednesday as traders assessed the U.S. debt ceiling deadlock, while minutes from the Federal Reserve’s last policy meeting were also in focus for guidance on future interest rates. Spot gold was little changed at $1,975.72 per ounce, trading in a $9 range. U.S. gold futures were steady at $1,977.40.
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