The major benchmarks failed to make big moves Monday as investors looked ahead to several potentially market-moving events this week.
Most notably is the outcome of tonight's meeting between President Joe Biden and House Speaker Kevin McCarthy, who are desperately trying to negotiate the debt ceiling by the end of this month.
Biden and McCarthy will meet later tonight to discuss the debt ceiling crisis. Conflicting headlines over negotiations have emerged recently, though the president told reporters on Sunday a call between the two "went well."
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The ultimate goal is to reach a deal before June 1, which Treasury Secretary Janet Yellen has said is the date when the U.S. will likely run out of money to meet all of its financial obligations. Brian Rehling, head of global fixed income strategy at Wells Fargo Investment Institute, believes a default is unlikely to occur, even though it may come down to the eleventh hour.
"While the risks of a political miscalculation are higher than in the past, in our view it is unlikely that either party will want to be responsible for a U.S. government default," Rehling writes in a note to clients. "At some point, we expect politicians to pass an increase to the debt ceiling, just as they have [done] many times before. We expect this increase to occur before the U.S. government is unable to pay its bills."
Bullard, Kashkari hint at more rate hikes
Meanwhile, ahead of Wednesday's release of the minutes from the Fed's May meeting, St. Louis Fed President James Bullard said that he thinks inflation is "hanging up too high," and that the central bank should keep raising interest rates. Separately, Minneapolis Fed President Neel Kashkari told CNBC that even if there's a pause in rate hikes at the next Fed meeting in June, it doesn't mean "that we are done with our tightening cycle."
In single-stock news, Micron Technology (MU) tumbled 2.9% after China over the weekend banned the sale of the company's memory chips to several of the country's tech firms due to what it says is a security risk. Mark Murphy, chief financial officer at Micron, said they don't know why China initiated the ban, but estimated a low- to high-single-digit percentage impact to revenue.
As for the major indexes, the Nasdaq Composite rose 0.5% to 12,720, while the S&P 500 eked out a marginal gain to 4,192. The Dow Jones Industrial Average, on the other hand, slipped 0.4% to 33,286, as Nike (NKE) fell 4.0%. The athletic apparel and footwear retailer was downgraded to Sell at Williams Trading, with the firm citing a "choppy" recovery in China.
The best defensive ETFs
While today's price action was relatively muted, uncertainty surrounding the debt ceiling and the Federal Reserve's future plans for interest rates has the potential to spark market volatility.
As we've mentioned several times in this space, one of the best courses of action for risk-averse investors to take in this type of environment is a more defensive approach with their portfolio. Seeking out the best dividend stocks, or yield-friendly utility stocks or real estate investment trusts (REITs) are just a few ways to guard against a roller-coaster market.
Another tack is to take a broader approach with the best defensive ETFs. While these funds can cover a number of strategies, they are all designed to provide stability against any additional turbulence.
Related Content
-
What You Need to Know About Taxes in a Gray DivorceIf you're not careful about how assets are divided or sold, you could get hit with a big tax bill.
-
Focus on These Five Critical Areas in Retirement PlanningWorried about how you'll pay for your retirement? It can help to structure your finances around five key areas: taxes, income, medical, legacy and investments.
-
The Best Tech Stocks to BuyTech stocks are the market's engine of growth. But what defines a tech stock? And how do you find the best ones to buy? We take a look here.
-
Stock Market Today: Stocks Waver on Resilient Employment DataA private reading on payrolls had markets rethinking rate-cut bets just days ahead of the monthly jobs report.
-
Is Nike Stock Still a Buy After Earnings? Here's What Wall Street SaysNike stock is tumbling Wednesday after the retailer reported mixed earnings results and withdrew its full-year guidance.
-
Stock Market Today: S&P 500 Hits New High as Micron SoarsThe main indexes gained ground Thursday as strong earnings from memory chipmaker Micron fueled AI optimism.
-
Micron Stock Solidifies Strong Buy Status After EarningsMicron stock is soaring Wednesday after the memory chipmaker's fiscal Q4 earnings beat expectations and it gave an upbeat outlook. Here's what you need to know.
-
Stock Market Today: Visa's the Worst Dow Stock After DOJ SuesThe blue chip stock sold off after the Justice Department accused Visa of monopolizing the debit card market.
-
Stock Market Today: Dow, S&P 500 Eke Out New HighsIntel was among the best performers Monday, boosted by M&A news and reports of a potentially massive cash infusion.
-
Stock Market Today: Stocks Close Out Fed Week on a Quiet NoteNike jumped on news it's replacing its CEO, while FedEx slumped on disappointing earnings.
