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U.S. House Speaker Kevin McCarthy, R-Calif., speaks to the media on the U.S. Capitol in Washington, Wednesday, May 24, 2023.

Al Drago |: Bloomberg |: Getty Images:

This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see. You can subscribe here.

Stocks extended their slide as the debt ceiling crunch continues to worry investors.

  • Negotiations on the US debt limit are “making progress”, House of Representatives Speaker Kevin McCarthy said after the discussion at the White House yesterday. But Representative Steve Scalise told members they should not stay in Washington over the weekend to vote on the deal, suggesting talks continue into next week.
  • US markets closed lower on Wednesday, with the Dow Jones Industrial Average falling for a fourth straight day as talks over the debt ceiling remained uncertain. Asia-Pacific stocks were lower on Thursday. Hong Kong’s Hang Seng index fell 2%, leading to regional losses and falling to a two-month low.
  • Shares of Nvidia rose 24.7% in the extended session after it forecast sales of $11 billion for the current quarter, well above expectations of $7.15 billion. The semiconductor company also beat expectations for its first-quarter profit and revenue.
  • The PC sector is not doing as well as the semiconductor sector. Lenovo, the world’s largest PC maker, reported a 24% year-over-year revenue decline in the first quarter. Still, the company’s CFO is optimistic that its non-computer businesses, such as infrastructure and services, will help the company grow.
  • Pro Summer vacation is coming up in the US and that means the travel season is about to start. CNBC checked out leisure and entertainment stocks to see which could rise at least 10% and are recommended by about 60% of analysts.

Stocks extended their slide as the debt ceiling crunch continues to worry investors.

The S&P 500 was down 0.73%, the Dow was down 0.77% and the Nasdaq Composite was down 0.61%.

Meanwhile, the Cboe Volatility Index (VIX), which measures investors’ expectations of how volatile S&P prices will be over a 30-day period, breached the 20-mark barrier. While the reading is the highest since May 4, signaling growing fears and uncertainty in the market, it is still not as high as it was during the banking turmoil in March. Investors are therefore fearful, but still hopeful US lawmakers may still come to an agreement.

But with exactly one week to go before June 1, the day Treasury Secretary Janet Yellen warned that the White House could run out of debt, time is running out.

There have already been consequences. Fitch Ratings just put the United States’ AAA credit rating on negative view. The short-term yield of the Treasury has risen recently and is against the 6% mark. If the US defaults and goes down, short-term bond prices, which move inversely with yields, could fall even more sharply. (Side note: Early-dated Treasuries tend to rise in price during crises because investors still view them as a safe-haven asset.)

Dow futures slipped on credit rating news, but Nasdaq 100 futures jumped on Nvidia’s bright forecast. The semiconductor company added $220 billion to its market capitalization in extended trading, equivalent to the entire market cap of Advanced Micro Devices, CNBC’s Robert Hume and Sarah Min noted. But they also warned investors that Nvidia’s overnight gains could be a mirage, like computer-generated graphics, and disappear in regular trading.

(If only that were the case with debt limit uncertainty.)

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