The long weekend in the US is over but the standoff between Republicans and Democrats in Congress might go on. Optimism about the debt ceiling deal is dampened by statements from Republicans. Meanwhile, stock investors are assessing risks. The overall picture is smudged by the prospects of further monetary tightening. Another piece in the puzzle is the consumer sentiment index.

Trading floors in the US and the UK were closed on Monday, but today futures on the US stock indices logged a modest upward trajectory. On Friday, the benchmark stock indices grew by more than 1%, but the Nasdaq in particular jumped by over 2%. The indices traded mixed in the New York pre-market today. The Dow Jones went down under Chevron’s pressure. The S&P 500 and the Nasdaq gained 0.16% and 0.6% respectively.
The major stock indices could extend their dynamics unless US legislators come up with a surprise. The S&P 500 is expected to trade in the intraday corridor between 4,180 and 4,260.
The catalyst for growth on Wall Street today is optimism about artificial intelligence. This is bullish for the high-tech sector and the S&P 500 and the Nasdaq in particular.
Nvidia shares leapt by 4.5% in the pre-market. The company unveiled its plans yesterday on building Israel's most powerful AI supercomputer to meet growing demand for AI-based applications.
Following the news, Nvidia’s market value topped 1 trillion dollars for the first time on Tuesday, making it the first US chipmaker to join the trillionaire club. The company's shares rose to 406.01 dollars in premarket trading.
Meta, which was valued at roughly $670 billion at its last closing, hit the trillion dollar market cap milestone in 2021, while Apple, Alphabet, Microsoft and Amazon are still in the club.
AI companies have received a major boost after Nvidia stunned investors last week with its earnings forecast that beat analysts' expectations by more than 50%.
Wall Street analysts called Nvidia's forecast "incomprehensible" and "cosmic." Despite this, the sector rose along with the Philadelphia Semiconductor index by more than 13%.
Shares of big AI players, including Microsoft and Alphabet, were up about 1% on Tuesday before the opening bell. Other chip makers, including Advanced Micro Devices, Marvell Technology and Intel, added about 3% each.
Tesla shares rose by 4.2% and were set to trade higher on Friday after Elon Musk arrived in China's capital Beijing on Tuesday, where he is expected to meet with senior Chinese officials and visit Tesla’s production facility in Shanghai.
Shares of Ford Motor added 3.6% after Jeffrey’s upgraded the automaker's rating to Buy.
Obviously, optimism about the high-tech sector is growing and supporting the indices today, but further political debates around the public debt ceiling may overshadow the market sentiment.
US President Joe Biden and Republican Speaker of the House Kevin McCarthy on Sunday signed an agreement to temporarily suspend the debt ceiling and cut some federal spending. 
The US House Rules Committee said it would meet today to discuss the deal. However, some Republican lawmakers today said they would oppose the bill. So, the bipartisan agreement could face a rough path through Congress.
While the extreme wings of both parties have expressed some concern over the details of the agreement, the market is suggesting that the moderates will see it through to Friday. Both houses of Congress must vote to raise the debt ceiling by June 5.
The Treasury will then sell up to $1 trillion in new debt by the end of the year to replenish its purse, which could cause volatility in the bond market amid a shuffling of cash management strategies.
Despite the ongoing confrontation, investors reassessed the risks of default, now expecting modest risks. Relief from a likely increase in the US debt ceiling this week is tempered by the uncomfortable prospect of higher Fed’s interest rates. Investors also abandon any hope of monetary easing in 2023.

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