- After Biden and House Rep. Speaker McCarthy announced they had a fruitful debt ceiling discussion, US market futures increased while Treasury yields and an indicator of dollar strength remained unchanged.
- The moderately bullish but cautious tone permeated Asian stocks, with benchmark indexes in Hong Kong, Japan, South Korea, and Australia trading higher on Tuesday. While Biden stated that he and House Rep. Speaker McCarthy agreed that default was not an option in ongoing talks, investors are on pins and needles.
- Futures for the S&P 500 and Nasdaq 100 rose roughly 0.3%, an indicator of Asian markets rose 0.3%, and Euro Stoxx 50 futures jumped 0.2%. Bitcoin rose for the fourth time in five days.
- Although short-term rates hiked on Monday, yields on policy-sensitive 2-yr Treasuries were barely changed at 4.32%. Government bond yields in Australia and New Zealand increased somewhat.
- This followed a day of ups and downs in American markets, with the S&P 500 oscillating between gains and losses before closing flat. The Nasdaq 100 climbed 0.3%, but chipmakers were under pressure after China claimed Micron products failed a cybersecurity inspection.
- Investors will remain cautious until there are clearer indicators that the stalemate between Democrats and Republicans will be broken before the government runs out of funds. US Treasury Secretary Yellen stated that the prospects of the US paying all of its payments by mid-June are very low.
