Investing.com -- U.S. stocks are seen opening higher Tuesday after negotiators tentatively agreed on a deal to lift the debt ceiling to avoid a default, while Nvidia could join the $1 trillion club.
Democratic President Joe Biden and top congressional Republican Kevin McCarthy reached a tentative deal over the weekend to suspend the ceiling on U.S. government borrowing for a couple of years, taking the issue past the potentially hard-fought upcoming presidential election and averting a default that would have had disastrous economic repercussions around the globe.
However, the deal still has to get through both houses in a narrowly divided Congress before the government runs out of money to pay its debts, which the Treasury warned Friday will happen by June 5.
The agreement faces one of its first major tests in Congress later today when the House Rules Committee examines the bill.
While this turn of events has prompted a degree of optimism on Wall Street as traders return from the Memorial Day holiday, a deal on the debt ceiling getting done may give more reason for the Federal Reserve to feel confident about raising rates again.
The recent hotter-than-expected inflation numbers had already resulted in the market pricing in a 60% chance of a 25 basis-point hike from the Fed in June.
The week sees speeches from Richmond Fed President Thomas Barkin and Philadelphia Fed President Patrick Harker , along with board member Philip Jefferson scheduled to speak, ahead of Friday’s widely watched monthly jobs report .
The CB consumer confidence index for May is Tuesday’s main economic data release, and is expected to show a small decline to 99.0 from 101.3 the prior month.
On the corporate front, HP (NYSE: HPQ ) is set to unveil its second quarter earnings after the close today, with investors keen to see how much a post-pandemic slide in PC demand has hit the personal computer and printer maker.
Nvidia (NASDAQ: NVDA ) will also remain in the spotlight with the chipmaker on track to breach $1 trillion in market capitalization for the first time, after last week's impressive revenue forecast as AI takes center stage.
Oil prices slumped Tuesday, reversing earlier gains on U.S. debt ceiling optimism as a stronger dollar and concerns about China's lackluster economic recovery weighed.
Worries over the strength of the Chinese recovery, the world's largest crude importer, have hit the crude market this year, and traders are focusing on key manufacturing and service sector data for May, due on Wednesday.
A stronger dollar also hit the market, with the greenback climbing to a two-month high on raised expectations of further interest rate hikes by the Federal Reserve.
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