Wall Street Today | McCarthy Signals Debt Deal Optimism as US Put on Credit Watch

"Several participants noted that if the economy evolved along the lines of their current outlooks, then further policy firming after this meeting may not be necessary," said the minutes of their May 2-3 meeting released Wednesday.

The California Republican said after a four-hour meeting between his and President Joe Biden’s hand-picked negotiators that a deal was possible before June 1.

Hours later, Fitch Ratings placed the United States' AAA credit rating on watch, a sign of growing unease about the country's ability to avert a first-ever default. The US received a credit downgrade during similar turmoil in 2011.

The deadlock in debt-ceiling negotiations is adding to default concern around a number soon-to-mature Treasury bills and also starting to dent investors' appetite for risk more broadly.

Rates on those due June 1 and June 6 at one stage on Wednesday topped 7%, around 4 percentage points above instruments maturing May 30, while other securities in the first weeks of June also saw their yields leap.

European luxury goods makers came under pressure for a second day, extending a rout that's wiped out about $60 billion in market value, in early signs of a turn in sentiment for a sector that's been "priced for perfection."

Twitter crashed repeatedly on Wednesday during a highly anticipated live audio chat between Elon Musk, Twitter's owner, and Florida Governor Ron DeSantis, hampering the politician's announcement he is running for the Republican presidential nomination.