U.S. stock futures edged higher ahead of the open on Monday as investors took hope that lawmakers can reach a deal in the debt-ceiling standoff.
Contracts on the S&P 500 (^GSPC) added 0.39%, while the Dow Jones Industrial Average (^DJI) gained 0.37%. The technology-heavy Nasdaq Composite (^IXIC) edged up 0.31%.
The ticking bomb of a potential default by the U.S. government will be front and center for investors again this week. President Joe Biden, House Speaker Kevin McCarthy and other congressional leaders are planning to meet Tuesday to resume budget negotiations, after postponing talks set for Friday.
Meanwhile, Treasury Secretary Janet Yellen said at the weekend the discussions are making progress, The Wall Street Journal reported. She plans to meet senior bankers to discuss the debt limit.
JPMorgan Chase & Co. CEO Jamie Dimon said the bank has set up a “war room” looking at contingencies if the debt limit isn’t raised in time. Dimon has already warned that markets will be gripped by panic as the U.S. approaches a possible default on its sovereign debt.
Some bearish voices on Wall Street, including Morgan Stanley’s Michael Wilson, have warned that debt-limit debate could trigger sharp swings in the equity market.
Most clients “believe it will ultimately get resolved, but not without some near-term volatility,” Wilson wrote in a note.
Government bond yields were higher. The yield on the 10-year Treasury traded up to 3.48%, while yields on the two-year note rose to 4.0%. The dollar index ticked down following a 1.45% rally last week, its strongest one-week gain since late September of 2022, according to JPMorgan.
Elsewhere, in Washington, former executives from Silicon Valley Bank and Signature Bank are expected to testify before the Senate on Tuesday.
Meanwhile, earnings season continues with notable companies set to report, including retailers Walmart (WMT), Target (TGT) and Home Depot (HD). China’s tech giants Alibaba (BABA) and Tencent (TCEHY) are also on the docket this week.
Wall Street’s calendar includes monthly retail sales. Economists surveyed by Bloomberg expect the headline print to grow by 0.8% in April, up from 1% drop last month. Some strategists argue that headline figures will likely be boosted by strong auto sales in the month, providing more insight on the state of the consumer.
In single stock moves, Magellan Midstream Partners, L.P. (MMP) shares rallied over 8% Monday morning after pipeline operator ONEOK, Inc. (OKE) agreed Sunday to buy smaller rival Magellan Midstream Partners for about $18.8 billion including debt, forming the second-largest U.S.-based pipeline company by stock-market value.
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Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv
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