Markets slid, but didn’t tumble, on Monday as U.S. lawmakers failed to reach an agreement during budget negotiations over the weekend.
In Asia, Japan's Nikkei average closed 0.8 percent down, as Hong Kong’s Hang Seng dipped 0.7 percent. The Shanghai Composite fell 3.0 percent.
Monday marked the end of a four-day rally for European stocks as European shares fell on early trade. The Stoxx Europe 600 Index, the continent’s benchmark, dropped 0.3 percent to 271.32 midday.
Stock index futures for the S&P 500, Dow Jones Industrial Average, and Nasdaq were all down less than one percent on Monday morning.
Only eight days remain before the Treasury Department’s August 2 deadline for raising the debt ceiling is reached, after which the agency says the U.S. will begin to default on its obligations. Lawmakers worked through the weekend to come up with an agreement, but a deal remained elusive as of Monday morning.
House Speaker John Boehner, R-Ohio, indicated Sunday afternoon that he may try to pass a short-term, six-month deal with the Senate without the president’s sign-off. Senate Majority Leader Harry Reid, D-Nev., released a statement Sunday night saying he and House Minority Leader Nancy Pelosi, D-Calif., would not support such a short-term deal. “A short-term extension would not provide the certainty the markets are looking for, and risks many of the same dire economic consequences that would be triggered by default itself,” Reid said.
At a press conference Friday, President Obama said, “I think it’s very important that the leadership understands that Wall Street will be opening on Monday, and we better have some answers during the course of the next several days.” But, he added, “I remain confident that we will get an extension of the debt limit and we will not default.”