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US stocks falter as investors digest debt ceiling developments and Fed Chair Powell’s comments, with the Dow Jones down over 150 points (-0.5%) and the S&P 500 and Nasdaq falling 0.4% each.

• GOP negotiators walking out of a debt ceiling meeting dampens hopes for a swift resolution, while Fed Chair Powell suggests that stress in the banking sector may obviate the need for immediate rate hikes to address inflation concerns.
• Deere stocks surge over 3% on strong earnings and revenue performance, while Foot Locker shares slump more than 23% due to disappointing quarterly results.
• Dow Jones rises 0.4%, S&P 500 gains 1.8% (best week since March), and Nasdaq surges 3.3% (biggest weekly gain in two months) amid overall positive performance for the week.
• Dollar index retreats to around 103, distancing itself from the recent two-month high, as investors monitor the debt ceiling impasse and reassess expectations for the Fed’s next move.
• US 10-year Treasury note yield reaches a nearly two-month high of 3.6% as market expectations for a June interest rate hike increase.
• Retail sales data reflects resilient consumer spending and robust jobs market, while congressional leaders and President Biden express optimism about reaching a debt ceiling agreement to avoid default.

The E-mini S&P 500 exhibits signs of absorption as it reaches the higher extreme above the previous balanced price range, hinting at a potential return to equilibrium. The market trading above the Year’s, Quarter’s, and Month’s developing value areas, remains imbalanced to the upside, technically. A close inside the mentioned balanced price range may indicate a possible downside move towards its mean.

Short- to median-term calculations align with a downside bias, while positive volatility may foster bearish sentiments in the market. In the intraday structure, supportive buyers are expected to emerge around the previous VWAP close level, while sellers might position themselves near the highs and volume distribution areas.

Resolving the debt ceiling issue could uplift market sentiment, and expectations for a 25 bps increase in interest rates have slightly risen, potentially leading to a temporary pause in the rate path to support the dollar and combat inflation.

Amidst the US debt talks, gold prices surged about 1.2% to around $1984 as investors sought safe-haven assets in response to the prevailing uncertainties.

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