The ongoing negotiations over the U.S. debt limit have left investors and markets on edge, as uncertainty continues to loom. While House Speaker Kevin McCarthy expressed optimism about the progress made in the talks, Representative Steve Scalise’s suggestion that negotiations may continue into the following week indicates that a resolution is not imminent.

The consequences of the impasse are already being felt, with Fitch Ratings placing the United States’ AAA credit rating on negative watch. This development, coupled with the approaching June 1 deadline when the U.S. government could start missing payments, has heightened concerns among investors.

Stocks have extended their downward slide, with the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all experiencing losses. The Cboe Volatility Index (VIX) has breached the 20-mark barrier, reflecting increased fears and uncertainty in the market.

In contrast, Nvidia, a semiconductor company, saw a significant surge in its shares after projecting higher sales for the current quarter than expected. However, analysts caution that overnight gains may not be sustained in regular trading.

As time ticks away before the June 1 deadline, the urgency for a resolution grows. The potential consequences of a default, including further market volatility and downgraded credit ratings, highlight the critical importance of reaching a deal. Investors remain hopeful that U.S. lawmakers will find a solution, but the clock is ticking, and the outcome remains uncertain.