US stock futures displayed minimal changes on Wednesday following a positive finish during Tuesday’s regular session. The S&P 500 and Nasdaq Composite reached their highest levels in over nine months, contributing to market optimism. In extended trading, Dave & Buster’s and Stitch Fix experienced notable gains in response to their upbeat quarterly results. However, Coinbase faced a significant decline of 12.1% after being sued by the SEC. Amidst these developments, the S&P 500 index appears uncertain about its next move, given the resolution of the US debt ceiling standoff.
Over the weekend, President Joe Biden signed an agreement into law, effectively lifting the US debt ceiling until 2025. This development has alleviated concerns about a politically-induced US debt default and is expected to provide reassurance to the markets. With this critical issue addressed, investors anticipate greater stability moving forward. The latest jobs report has reduced the likelihood of an interest rate hike by the Federal Reserve on June 14. Market sentiment, as reflected in the CME FedWatch Tool, has shifted from a 66% probability of a rate hike to 25%. This belief that rate hikes may end this month is seen as positive for the S&P 500. However, experts do not expect a rate cut from the Federal Reserve in the near future. Despite a positive response on Friday, Monday saw a more restrained reaction, leading to a 0.2% loss for the S&P 500.
Given the dearth of significant data this week, many traders are adopting a cautious stance, waiting for the June 14 Fed decision to gain clarity and prompt market action. This pivotal event is expected to provide certainty and potentially shape the trajectory of the markets in the days ahead.