U.S. stock futures were flat on Wednesday night as Wall Street hoped that the debt ceiling crisis would soon see a resolution.
Dow Jones Industrial Average futures slipped by 28 points, or 0.08%. Futures linked to the S&P 500 and Nasdaq 100 futures declined by 0.05% and 0.02%, respectively.
The major averages all ended Wednesday’s regular session higher. The Dow gained more than 400 points. The S&P 500 rose 1.19%, and the Nasdaq Composite advanced 1.28%. A rebound in regional bank shares also contributed to Wednesday’s rally. The SPDR S&P Regional Bank ETF (KRE) jumped more than 7%, while Western Alliance shares surged more than 10%.
Investors’ sentiment seemed to rise after Washington leaders indicated that they are moving forward on debt ceiling talks. House Speaker Kevin McCarthy told CNBC’s “Squawk Box” on Wednesday that he does not believe the U.S. will default on its debt. President Joe Biden also stated in later remarks that he was confident lawmakers would come together to reach a deal and avoid a default.
Meanwhile, Wells Fargo’s head of equity strategy Chris Harvey was skeptical that progress has been made in Washington on the debt ceiling talks.
“We still think that macro is going to start to weigh over things. We think people are getting too excited about the debt ceiling in the short term. And we think that there’s probably some more downside as we go forward in time,” Harvey said Wednesday on CNBC’s “Closing Bell: Overtime.”
“We think it’s going to get a little bit more tenuous as we go forward in time,” he continued. “We do think a deal [will] get done, but we think it’s too optimistic at this point in time.”
Investors will be looking toward retail giant Walmart’s earnings report Thursday morning for insights on the health of the consumer. China-based tech giant Alibaba is also set to report earnings before the bell.
Wall Street will also watch out for the weekly jobless claims numbers to gauge the strength of the labor market. The Philadelphia Fed’s manufacturing survey numbers for May, as well as existing home sales data for April, are also slated to be released Thursday morning.
