American equity futures rose modestly on cautious optimism that the US will avoid a catastrophic default following the weekend's tentative debt-ceiling agreement. European stocks fluctuated in light trading due to the holiday season.
With cash markets closed for Memorial Day, contracts on the S&P 500 and Nasdaq 100 were up about 0.3% each. The dollar, which has benefited from the uncertainty surrounding the statutory borrowing limit, maintained its Friday decline, while Treasury futures linked to the 10- to 30-year segment of the US government bond market rallied on light volume.
President Joe Biden and House Speaker Kevin McCarthy both expressed confidence that their agreement to cut spending and raise the debt ceiling will be approved by Congress. Even if lawmakers reach an agreement before the US government runs out of cash in about a week, traders will face a slew of challenges, ranging from the possibility of another Federal Reserve rate hike to a flood of bond issuance from the US Treasury Department.