Traders on the floor of the NYSE, May 17, 2023.
Stock futures lacked direction on Monday morning as traders monitored the negotiations over the U.S. debt ceiling.
Futures for the Dow Jones Industrial Average and S&P 500 were flat. Nasdaq 100 futures were 0.03% higher.
Stocks rose last week despite the uncertainty in Washington. The Nasdaq Composite climbed 3.04%, while the S&P 500 gained 1.65%. The Dow added 0.38%.
President Joe Biden and House Speaker Kevin McCarthy, R-Calif., are set to meet Monday to continue negotiations. Treasury Secretary Janet Yellen has said the U.S. could default on its debt as early as June 1.
The market has continued to grind higher, led by tech stocks, even in the face of a potential debt default and stubborn inflation. Bank of America strategist Savita Subramanian on Sunday hiked her year-end target for the S&P 500 to 4,300 from 4,000, saying that the focus of companies on efficiency would make earnings more stable and that stocks were not overvalued.
“Current valuations are not low, but rarely are low during profits recessions. On cyclically adjusted earnings, valuations argue for price returns of 5% per year for the S&P 500 over the next decade,” Subramanian said in a note to clients.
The first-quarter earnings season is winding down, but there are a few notable reports in the coming days, with Zoom Video on Monday and Lowe’s and Dick’s Sporting Goods on Tuesday.
The upcoming week has a relatively light slate of economic data, highlighted by a second reading for first-quarter GDP on Thursday and the personal consumption expenditures inflation gauge on Friday. The release of the Federal Reserve meeting minutes on Wednesday could also shed light on how central bankers are thinking about the possibility of further rate hikes.
Traders will also be keeping an eye on JPMorgan Chase’s investor day on Monday.