S&P 500 falls on cautious grounds ahead of US debt ceiling talks.

• Market sentiment remains uncertain as traders await key data/events after unimpressive details from the Fed’s banking survey.
• S&P500 futures post slight losses, breaking a two-day uptrend; Yields struggle to defend their latest rise.
• The return to the markets may entertain traders awaiting negotiations on the US debt ceiling and inflation data.

The risk profile decreases during the early hours of the European session on Tuesday, as markets await key US debt ceiling talks amid the recent rally in fears of a US default. In addition, optimism in the markets is threatened by the discouraging comments of the president of the Federal Reserve of Chicago, Austan Goolsbee, and by the quarterly survey on bank loans of the Federal Reserve (Fed). However, it should be noted that US Treasury Secretary Janet Yellen’s fears of the US defaulting on the bonds on June 1 and US-China tension also weigh heavily. about the feeling.

Having said that, S&P 500 futures register slight losses around 4,150 pointsthe first in three days, while 10-year and 2-year US Treasury yields struggle to extend the three-day uptrend into early Tuesday.

The president of United States, Joe Bidenis preparing to face the Republican speaker of the House of Representatives, kevin mccarthyto the leader of the Republican minority in the Senate, mitch mcconnell, and the leading Democrats in Congress. Ahead of the meeting, Reuters shares news suggesting that the US Treasury Secretary, Janet Yellen, has been in personal contact with business and financial leaders to explain the “catastrophic” impact of a US debt default. in the US and global economy, two sources familiar with the matter said Monday.

Besides, The Federal Reserve’s (Fed) quarterly bank lending survey showed a tightening of standards and lower demand for loans commercial and industrial companies to large and medium-sized companies, as well as small companies, during the first quarter.

It should be noted that Goolsbee of the Chicago Fed stated that “it is too early to say what the next policy step will be“, while explaining that there were many uncertainties about the impact of the credit tightening on the economy.

Another factor that could influence market sentiment is the improvement in inflation expectations in the US, according to the 10-year and 5-year inflation rates of the Federal Reserve of St. Louis (FRED).

In this context, markets remain uncertain, but the DXY Dollar Index continues to rise. Still, Gold and WTI Crude Oil prices remain slightly higher at time of writing.

Elsewhere, debt ceiling talks and central bank comments may entertain traders amid a light calendar ahead of the US Consumer Price Index (CPI) release on Wednesday. for april.