Debt Talks and Core PCE Data Drive Market Sentiment, Dow Futures Tick Up

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U.S. stocks are poised for a slight upward movement, driven by ongoing debt ceiling negotiations and the anticipation of the release of the Federal Reserve's core Personal Consumption Expenditures (PCE) data.

Dow Futures indicated a modest gain of 45 points, equivalent to a 0.1% increase. S&P 500 Futures showed a 0.2% rise, up 7 points, while Nasdaq 100 Futures climbed 40 points, or 0.3%.

The Nasdaq Composite experienced a notable surge of 1.7%, fueled by Nvidia (NASDAQ:NVDA), a prominent semiconductor company projecting record-breaking results due to high demand for chips used in artificial intelligence technology.

The broader S&P 500 also displayed a positive trend, advancing by 0.9%. However, the Dow Jones Industrial Average dipped slightly by 0.1% amidst uncertainties surrounding the ongoing debt ceiling negotiations.

President Biden expressed optimism regarding the progress made in discussions with top House Republican Kevin McCarthy. Reports suggest that the two sides are finalizing a deal to raise the U.S. government's debt ceiling by $31.4 trillion for a two-year period. However, the agreement still needs to navigate through the Republican-controlled House of Representatives and the Democratic-controlled Senate, with the approaching June 1 deadline.

Market participants eagerly await the release of the Federal Reserve's core PCE price index, a crucial inflation indicator expected to reveal a 4.6% annual increase and a 0.3% month-on-month rise in April, excluding volatile components such as energy and food.

Investors closely monitor economic data and comments from Federal Reserve officials, leading to a reevaluation of expectations for future interest rate hikes. Consequently, predictions for the central bank's actions in June now show an almost even split between a rate hike and a pause, while expectations of rate cuts later in the year have significantly decreased.

In the corporate sphere, the earnings season is winding down. Notable premarket activity is expected for retailer Gap (NYSE:GPS) and semiconductor stock Marvell Technology (NASDAQ:MRVL), while Ulta Beauty (NASDAQ:ULTA) experienced a decline in after-hours trading following the release of its latest financial figures.

Oil prices rebounded on Friday following weakness in the previous session as Russia downplayed the likelihood of further production cuts by the OPEC+ group at their upcoming meeting in June. Russian Deputy Prime Minister Alexander Novak stated that no new measures are expected, contradicting earlier warnings from Saudi Energy Minister Prince Abdulaziz bin Salman.

Gold futures also saw a 0.5% increase, reaching $1,952.85 per ounce, and the EUR/USD currency pair traded 0.2% higher at 1.0747.

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