Wall Street futures inched lower on Tuesday as another round of high-level talks to raise the U.S. debt limit did not lead to a deal, raising the spectre of an unprecedented default.

President Joe Biden and House Speaker Kevin McCarthy could not reach an agreement on Monday on how to lift the $31.4 trillion debt ceiling ahead of the June 1 deadline, but vowed to keep talking.

"Debt ceiling talks are inching forward, but it's slow progress, and with uncertainty hanging in the air, gains on equity markets are being held back," Susannah Streeter, head of money and markets at Hargreaves Lansdown wrote in a note.

"If no agreement is reached, the U.S. could default on interest it owes on its debts, sending borrowing costs soaring and shockwaves through the global economy."

Trading on the S&P 500 index has been stuck in a 30-point range in the last two sessions as U.S. debt ceiling talks seem to have reached an impasse, while a megacap-led bounce on the Nasdaq helped it close the previous day higher.

Investors also await S&P Global's flash reading of the U.S. Composite PMI Index for May due later in the day. The Commerce Department's April personal consumption expenditure (PCE) index reading, the Fed's preferred inflation gauge, is due on Friday.

Megacaps were mixed in the early hours of Tuesday, with Microsoft Corp up 0.3% in premarket trading, while Meta Platforms Inc dipped 0.2%.

Retailer Lowe's Companies Inc fell 2.1% is cut its annual comparable sales forecast, as demand dwindles for home improvement goods with high inflation forcing consumers to cut back on discretionary spending.

At 5:39 a.m. ET, Dow e-minis were down 70 points, or 0.21%, S&P 500 e-minis were down 5 points, or 0.12%, and Nasdaq 100 e-minis were down 6 points, or 0.04%.

(Reporting by Shreyashi Sanyal in Bengaluru; Editing by Vinay Dwivedi)