Stock Futures Open Slightly Higher As Investors Consider Debt Ceiling Changing

Stock futures opened a little higher on Wednesday after a choppy trading session, with investors closely monitoring developments in Congress as lawmakers rushed to reach a deal to avoid a government default. here the middle of the month.

During the regular trading day, the top three stock averages had escaped earlier losses after Senate Minority Leader Mitch McConnell offered Democratic lawmakers a deal temporarily extend the government’s borrowing limit until December. Such a move would provide time to prevent a government default that many experts say could arise as early as October 18.

The issue of the debt ceiling has been at the center of the concerns of business leaders and market players. Earlier Wednesday, President Joe Biden met with key business leaders, including Jamie Dimon, CEO of JPMorgan and Adena Friedman, CEO of Nasdaq, who urged the president to pressure lawmakers to raise the debt limit and avoid a government default that they say could have a catastrophic impact on the U.S. economy.

“The debt ceiling is currently one of the many factors that we believe are causing these gyrations in the markets. The market will certainly be reassured when there is an agreement, when it is more formalized. “said Yung-Yu Ma, chief investment strategist. for BMO Wealth Management, told Yahoo Finance. “Our baseline scenario is that it probably drags a bit longer, getting closer to the October 18 deadline that Janet Yellen spoke about.”

The ongoing debt ceiling debate has been just one of many market concerns in recent weeks, all of which have come together to catalyze volatility in risky assets.

In addition to concerns about the debt ceiling, “the markets are looking for a solution, or at least an end in view of the supply chain problems, to escalating inflationary pressures,” Ma added. “The markets are also starting to start. look to the Fed’s November meeting, and hope the Fed doesn’t post excessive future interest rate hikes either… So a number of things are happening. “

The story continues

Soaring energy and commodity prices also weighed on investor optimism, reinforcing the continuing trend of upward price pressures in the global economy. U.S. crude oil futures, however, fell for the first time in five days on Wednesday following a Financial Times report that U.S. Energy Secretary Jennifer Granholm had not ruled out releasing crude oil from the government’s strategic petroleum reserve or ban crude exports in an attempt to drive up prices. in check. Intermediate West Texas crude oil hit its highest price since 2014 earlier this week.

“If you look at the history of these types of environments, especially in the face of the inflation we see today, energy stocks tend to perform better. They are one of the best hedges against inflation. I think it probably is. Persist this time, “DTN market analyst Troy Vincent, market analyst Troy Vincent, told Yahoo Finance Live on Wednesday. “However, the difference between today and the examples of the past is in the emphasis on ESG investing – and this is one of the main reasons why, even if you see the prices of energy commodities reaching or approaching record highs on a global scale, they don’t really see it equating to a record high stock valuations of energy companies around the world. ”

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6:05 p.m. ET Wednesday: Stock futures remain on the rise

Here’s where the markets were trading on Wednesday night:

• S&P 500 Futures Contracts (ES = F): +3.5 points (+ 0.08%), to 4,357.5

• Dow Futures (YM = F): +25 points (+ 0.07%), at 34,316.00

• Nasdaq Futures (NQ = F): +15.5 points (+ 0.11%) to 14,774.50

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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter