Investors were cautious on Tuesday as uncertainty over the ongoing debt ceiling negotiations weighed ahead of earnings from a number of major retailers. President Joe Biden and House Republican Speaker Kevin McCarthy ended Monday’s meeting without an agreement to raise the $31.4 trillion U.S. debt limit, though both sides talked about progress being made. Treasury Secretary Janet Yellen said it’s now “highly likely” that her department will run out of sufficient cash in early June.
The release of the monthly U.S. purchasing managers’ indices is also due Tuesday, and is expected to provide insight into how elevated interest rates are impacting the country’s services and manufacturing sectors. Later in the week sees the release of the April personal consumption expenditure index reading, the Fed’s preferred inflation gauge.
Retailers Lowe’s, Dick’s Sporting Goods, Williams-Sonoma, Intuit, and Toll Brothers are all due to report earnings. Oil prices edged higher as the U.S. driving season draws nearer, while gold futures fell 1% to $1,958.35/oz. EUR/USD traded 0.3% lower at 1.0777.