Traders on the NYSE floor, May 17, 2023.
Stock futures retreated slightly on Sunday night as traders monitored the US debt ceiling negotiations.
The future for the Dow Jones Industrial Average marked 63 points, or about 0.19%. S&P 500 futures were down about 0.21%, and Nasdaq 100 futures were also down 0.14%.
Stocks rose last week despite uncertainty in Washington. The Nasdaq Composite rose 3.04%, while the S&P 500 gained 1.65%. The Dow added 0.38%.
president Joe Biden and House Speaker Kevin McCarthyR-Calif., is scheduled to meet Monday at continue to negotiate. Secretary of the Treasury Janet Yellen said the US could default on its debt as early as June 1.
The market continued to grind higher, led by tech stocks, despite facing a potential debt default and stubborn inflation. Bank of America strategist Savita Subramanian on Sunday hiked him target by the end of the year for the S&P 500 to 4,300 from 4,000, saying that companies’ focus on efficiency will make earnings stronger and that stocks are not overvalued.
“Current valuations are not low, but rarely low during earnings recessions. On cyclically adjusted earnings, valuations argue for a price return of 5% per year for the S&P 500 over the next decade,” Subramanian said in a note to clients.
The first quarter earnings season is winding down, but there will be some notable reports in the coming days, with Video Zoom on Monday and said Lowe and Dick’s Sporting Goods on Tuesday.
The coming week has a relatively light slate of economic data, highlighted by the second reading for first-quarter GDP on Thursday and the personal spending expenditure inflation gauge on Friday. The release of the minutes of the Federal Reserve meeting on Wednesday could also shed light on how central bankers are thinking about the possibility of further rate hikes.
Traders will also be keeping an eye on JPMorgan Chase’s investor day on Monday.