Debt Limit Deal Prospects Bring Both Hope and Risk for Investors

Investors are optimistic about a potential deal to raise the debt limit and prevent the federal government from defaulting, as stock futures show modest gains and Treasury bill yields have fallen. Negotiators are reportedly just $70 billion in spending cuts away from a compromise, which could come as soon as Friday, paving the way for Congress to vote as soon as Tuesday. However, it remains unclear whether any such deal has enough support in Congress, with Republicans demanding deeper spending cuts and Democrats warning of a "huge backlash" if the White House caved to Republican demands.