By Shreyashi Sanyal
U.S. stock index futures dipped on Wednesday as a deal to raise the nation's debt ceiling headed in for a pivotal vote by lawmakers, while another round of earnings highlighted the pinch of higher prices being felt by corporate America.
A bill to lift the $31.4 trillion U.S. debt ceiling and achieve new federal spending cuts made its way to the House of Representatives for debate on Tuesday and an expected vote on passage is due later on Wednesday.
House passage would send the bill to the Senate, where debate could stretch to the weekend, as a June 5 deadline loomed.
The debt ceiling debate has been an overhang for financial markets, but signs of progress have pushed the S&P 500 and the Nasdaq indexes toward monthly gains in May. The Nasdaq was on track for its best performance in May since 2020, rising 6.5%.
"Now that a debt ceiling deal has been reached and will most likely be passed by Congress, the challenge remains the Federal Reserve," Spartan Capital's chief market economist Peter Cardillo said.
Investors now await the Labor Department's closely watched jobs report for May, due on Friday, which could show how resilient the economy has been to high interest rates and inflation.
"With investors focusing on the Fed and incoming data, stocks are likely to rise further as market sentiment becomes less challenging," Cardillo added.
At 7:07 a.m. ET, Dow e-minis were down 74 points, or 0.22%, S&P 500 e-minis were down 11.75 points, or 0.28%, and Nasdaq 100 e-minis were down 29.50 points, or 0.20%.
Overnight, a report said Federal Reserve Bank of Cleveland President Loretta Mester said she sees no "compelling" reason to pause rate hikes.
Traders are pricing in a 64% chance of a 25-basis point increase at the Fed's June 13-14 meeting. [FEDWATCH]
Chicago purchasing managers' index (PMI) data is due later in the day, as is the Job Openings and Labor Turnover Survey (JOLTS) for April.
Advance Auto Parts Inc slumped 25.1% premarket after the auto parts retailer cut its full-year forecasts on higher costs.
Shares of Hewlett Packard Enterprise Co slipped 8.8% as it missed Wall Street estimates for second-quarter revenue on Tuesday.
HP Inc dropped 5% after it also missed quarterly revenue estimates, as inflation-hit customers spent less on the company's personal computers.
Nvidia Corp's shares fell 1.5% a day after it hit a record high and briefly joined an elite club of U.S. companies sporting a $1 trillion market value.
Other chipmakers including Advanced Micro Devices Inc, Micron Technology Inc and Intel Corp shed between 0.6% and 1.6%.
Separately, chip company Ambarella Inc tumbled 19% after forecasting second-quarter revenue below estimates.
(Reporting by Shreyashi Sanyal and Shashwat Chauhan in Bengaluru; Editing by Maju Samuel and Shounak Dasgupta)