5 Things to Know Before Markets Open

Negotiations on the debt ceiling continue and consumer spending is expected to move higher after two months of declines. Here’s what investors need to know today.

1. Yellen Emphasizes June 1 Deadline Ahead of Debt Ceiling Talks

The U.S. has about $88 billion remaining in extraordinary measures before the government will default on June 1, Treasury Secretary Janet Yellen reiterated in a letter to Congress. She had previously communicated the deadline to Congress and said she would continue to issue updates on when a U.S. default could occur. President Joe Biden is scheduled to meet with congressional leaders today at 3 p.m. ET to continue negotiations on the debt ceiling limit.

2. Consumer Spending Expected to Move Higher After 2 Months of Decline

After two straight months of decline, consumer spending is expected to tick upward when the U.S. Commerce Department releases its April retail sales figures at 8:30 a.m. ET. Economists expect retail sales to move up a seasonally adjusted 0.8% in April, following a revised drop of 0.6% in March.

3. Home Depot Misses on Revenue, Sales Growth

Shares of Home Depot (HD) were 4% lower in pre-market trading after its revenue and sales growth suggested that consumer spending on home improvement continues to soften following the pandemic boom. The hardware retailer reported quarterly revenue dropped 4.2% compared with last year’s first quarter, and same-store sales declined 4.5%, more than the 1.4% drop that analysts were expecting.

4. Wells Fargo Settles $1 Billion Shareholder Class-Action Lawsuit

Wells Fargo (WFC) will pay shareholders $1 billion to settle a class action lawsuit related to its 2016 scandal over face accounts. Shareholders, including mutual funds and pension funds, sued Wells Fargo after they said the company misled over how quickly it responded to the scandal, leading to a sluggish recovery that caused a decline in the stock price. Shares of Wells Fargo were little changed in pre-market trading.

5. White House Announces Oil Purchase as it Begins to Refill Reserves

The White House said it will buy 3 million barrels of crude oil as it begins to replace the oil released from its Strategic Petroleum Reserve last year in an effort to slow soaring gas prices. The purchase is only a fraction of the more than 275 million barrels released from the reserve last year, reducing the world’s largest oil reserve to its lowest levels since 1983.