AI giant gatecrashes Apple and Amazon’s $1 trillion club
Nvidia has become the world’s first chipmaker to reach a market value of $1 trillion (£800bn), as its shares surged on the back of booming demand for artificial intelligence (AI) hardware.
Shares in the US-based graphics chip designer rose as much as 7.7pc on Tuesday, bringing its market capitalisation to $1.02 trillion.
Nvidia joins iPhone-maker Apple, Microsoft and Amazon in becoming the handful of companies to have reached the trillion-dollar threshold.
It comes after chief executive Jensen Huang unveiled several new artificial intelligence-related products over the weekend.
The lineup included AI supercomputer platform DGX GH200, which is designed to help tech companies create successors to OpenAI’s ChatGPT. Google, Meta and Microsoft are among the first expected to use this new equipment.
Nvidia also announced a partnership with British advertising giant WPP to use generative AI to help produce cheaper adverts at scale.
Speaking at the Computex forum in Taiwan, Mr Huang said: “The programming barrier is incredibly low. We have closed the digital divide. Everyone is a programmer now - you just have to say something to the computer.”
The semiconductor company last week announced that second-quarter revenue would reach $11bn in the three months to the end of July, more than 50pc higher than Wall Street estimates.
Nvidia’s share price rocketed by 27pc in after hours trading in New York following the forecast, which added $200bn to its valuation.
06:42 PM
Signing off
That’s all from us. We’ll be back tomorrow with the latest. Until then, I’ll leave you with this tweet from Republican Ralph Norman, showing that the bipartisan US debt ceiling deal still faces opposition:
This "deal" does NOTHING to address the root problems that have led our country down a dangerous path and put us in a deep hole of nearly $32 trillion in debt. #NoDeal
— Rep. Ralph Norman (@RepRalphNorman) May 30, 2023
06:04 PM
Hollywood Bowl to limit further price increases, says chief executive
Hollywood Bowl has promised to keep bowling affordable for cash-strapped families, despite posting lower half-year profits.
Chief executive Stephen Burns said that the bowling chain plans to keep further price increases over the next year to a minimum.
He said: “We only need to increase prices by 2.5pc to 3pc to mitigate all of the cost pressures that are coming our way.”
The UK entertainment company on Tuesday announced pre-tax profits of £26.7m for the six months to March 31, a 20pc drop from £33.4m recorded during the same period last year.
However, Hollywood Bowl said that pre-tax profits increased 7.7pc to £24.8m after stripping out a temporary VAT reduction introduced during the pandemic to support the hospitality and tourism industry.
05:39 PM
CBI takes advice on insolvency as job cuts loom
The scandal-hit Confederation of British Industry (CBI) has brought in lawyers to advise on a potential insolvency filing ahead of a crunch vote next week.
Banking correspondent Simon Foy has the details:
The group’s board will be left with little option but to begin a winding up process if members vote against proposals to overhaul the CBI at an extraordinary general meeting (EGM) next week, Sky News reported.
In preparation for the possible outcome, the lobby group has hired an unnamed City law firm to provide counsel to its board on directors’ duties under company law.
Any insolvency process would be complicated by the fact that the CBI has a Royal Charter, which is granted by the monarch and signed off by the Privy Council.
04:56 PM
FTSE 100 delivers disappointing start to the week
The FTSE 100 has closed lower in the first day of trading after the long weekend.
The blue-chip index finished the session 105 points or 1.38pc lower at 7,522.07.
The decline cames on the back of reports that shop inflation has reached new record as coffee and chocolate prices jump.
Meanwhile, the mid-cap FTSE 250 index nudged up 0.07pc or 13 points to 18,807.37.
04:40 PM
AI could be as dangerous as nuclear war, ChatGPT creator warns
Artificial intelligence could be as dangerous as nuclear war, the bosses of the world’s biggest AI laboratories have warned.
Technology editor James Titcomb has more:
Executives and scientists including Sam Altman, the chief executive of ChatGPT maker OpenAI, and Demis Hassabis, the founder of DeepMind, have signed a statement urging governments to make addressing AI a “global priority” on a par with pandemics and nuclear war.
It is the first time that the world’s top AI bosses have collectively called for urgent action to address the risks to humanity from the technology.
The Center for AI Safety, a non-profit that organised the statement, said it was designed to “voice concerns about some of advanced AI’s most severe risks” amid a “broad spectrum” of concerns about the technology.
04:27 PM
Nearly 800 mortgage deals pulled as banks fear more rate rises
Nearly 800 mortgage deals have been pulled from the market amid rising concerns over higher interest rates.
UK banks and building societies have scrapped hundreds of offerings across both the residential and buy-to-let sector over the last week.
The number of residential mortgages has fallen by 373 to 5,012 since the start of last week, while the number of buy-to-let mortgages has fallen by 405 deals to 2,343.
The figures from financial data group Moneyfacts also showed the impact on mortgage rates, with the average rate on a two- and five-year fixed mortgage rising to 5.38pc and 5.05pc respectively since the start of May.
It comes after worse-than-expected inflation figures last week fuelled concerns that the Bank of England will continue to raise interest rates to keep a lid on prices.
03:43 PM
Nvidia hits $1 trillion market cap
Nvidia has become the world’s first chipmaker to reach a market cap of $1 trillion.
It comes after chief executive Jensen Huang unveiled several new artificial intelligence-related products over the weekend.
Last night, Jensen Huang of NVIDIA gave his very first live keynote in 4-years.
The most show-stopping moment from the event was when he showed off the real-time AI in video games. A human speaks, the NPC responds, in real time and the dialogue was generated with AI on the fly. pic.twitter.com/TDoUM1zSiy— Matt Wolfe (@mreflow) May 29, 2023
This included AI supercomputer platform DGX GH200 designed to help tech companies create successors to ChatGPT. Google, Meta and Microsoft are among the first expected to use the new technology.
Speaking at the Computex forum in Taipei, Huang, Mr Huang said:
The programming barrier is incredibly low. We have closed the digital divide. Everyone is a programmer now - you just have to say something to the computer.
03:22 PM
Handing over
That’s it from me today. My colleague Adam Mawardi will keep you updated until the evening.
03:00 PM
Musk commits to expanding Tesla in China after meeting its foreign minister
Elon Musk has highlighted the importance of maintaining relationships with China in his first visit to the country after the pandemic.
The Tesla chief met with foreign minister Qin Gang in Beijing where he said that the interests of the US and China are intertwined.
Mr Musk also said that he is willing to continue to expand the business in the country, adding that China’s vehicle market “has broad prospects for development”.
Mr Musk has joined Apple’s Tim Cook and Mercedes Benz’s Ola Kallenius in emphasising the importance of this relationship. Mr Kallenius told the German newspaper Bild am Sonntag last month that distancing itself from China is “an illusion”.
Tesla’s shares jumped by 5pc after Mr Musk met with China’s foreign minister.
02:32 PM
UBS sued by Credit Suisse investor arguing price was too low
UBS has been sued by an investor arguing the bank paid less than its rival Credit Suisse was worth in the government-brokered deal in March.
UBS offered Credit Suisse shareholders just 0.76 Swiss francs for each of their shares, while the stock closed at 1.86 Swiss francs on March 17, the last trading day before the deal was agreed.
Offering shareholders less than the then-current stock price goes against all the conventions of takeovers and ignores Credit Suisse’s broader value, wrote lawyer Dimitri Santoro on behalf of his client.
“In a takeover, the shares normally command a high premium,” the complaint reads.
The complaint was submitted by Santoro to the Zurich Commercial Court on behalf of an investor whose name was redacted, Bloomberg reports.
02:13 PM
Rishi Sunak to visit Washington for talks with Biden
Rishi Sunak will travel to Washington next week to hold talks with Joe Biden.
A spokesman for the prime minister said Mr Sunak will be in Washington on Wednesday and Thursday and will meet with Mr Biden, as well as members of Congress and US business leaders.
The leaders will discuss improving economic ties and how to sustain military support for Ukraine in its war against Russia.
The spokesman said: "The visit will be an opportunity to build on the discussions that the prime minister and President Biden have had in recent months about enhancing the level of cooperation and coordination between the UK and US on the economic challenges that will define our future.
"There will also be an opportunity to discuss issues including sustaining our support for Ukraine."
01:55 PM
The industry more damaging to the environment than airlines
Despite the clean and paperless allure of tech companies, Silicon Valley is fast emerging as a key threat to the race to net zero.
The world’s computing and information storage sector has a larger carbon footprint than the airline industry, while a single data centre can consume as much electricity as 50,000 homes.
That footprint is only going to grow as artificial intelligence (AI) and language models such as ChatGPT become increasingly embedded in the global economy.
Melissa Lawford reports. Read her full story here.
01:42 PM
Rate rise fears spook lenders
Here's more from Rachel Springall, finance expert at Moneyfacts, on what's driving jitters in the mortgage market:
Borrowers searching for a new deal may well be concerned about the latest developments in the mortgage market. Over the past few days, we have seen a few lenders withdraw selected fixed products, with some pulling out of the market, at least temporarily.
Product choice has started to fall, and as may be expected, average fixed mortgage rates are on the rise.
This volatility is down to the concerns surrounding future interest rate hikes, and lenders are reassessing their propositions.
Consumers looking to refinance will find rates around 5pc on average for a fixed deal, compared to around 3pc a year ago. It is vital borrowers seek advice to assess the situation and to find a mortgage that suits their circumstances.
01:13 PM
Russian rouble recovers as drones attack Moscow
The Russian rouble steadied today after slumping to a more than one-month low against the dollar as drones attacked Moscow.
Ukraine launched one of its biggest drone attacks on Moscow. Ukraine denied it was directly involved in the attack, while several drones were reportedly shot down.
It came as a favourable tax period ended, while the rouble has also faced pressure from local demand for foreign currency as Russian importers shift supplies to the east from the west and new trading patterns emerge.
The rouble was unchanged against the dollar at 80.83, earlier hitting 81.39 – its weakest point since April 28.
12:49 PM
US futures rise with debt ceiling deal in focus
Wall Street looks set to push higher at the open as politicians tentatively agreed to raise the US debt limit to help avert a default.
President Joe Biden and Republican House of Representatives Speaker Kevin McCarthy signed off on an agreement to temporarily suspend the debt ceiling and cap some federal spending over the weekend.
The US House Rules Committee will meet this evening to discuss the debt ceiling bill.
Nvidia also led a rally in tech stocks, with demand for AI on track to push the chipmaker's valuation above $1 trillion.
Futures tracking the S&P 500 rose 0.5pc, while the Dow Jones was up 0.2pc. The tech-heavy Nasdaq gained more than 1pc.
12:38 PM
CBI hires lawyers amid insolvency fears
The CBI is said to have called in lawyers to advise on potential insolvency proceedings ahead of a crunch vote by thousands of its members next week.
The scandal-hit business lobby group has hired an unnamed City law firm to provide advice on directors' duties under company law, Sky News reports.
The legal advice comes ahead of a vote at next week's extraordinary general meeting. The CBI will need the backing of the majority of its members on its proposals to deliver a new mandate.
Insiders fear that losing the vote would leave the board little option but to start winding up the organisation – a process that could be complicated by its Royal Charter.
Dozens of high-profile members – including Aviva and John Lewis – have cut ties with the CBI following allegations at sexual harassment.
12:16 PM
Meal deal sandwich maker boosted by price rises
A sandwich maker that supplies supermarkets including M&S and Tesco has reported a jump in revenue after hiking its prices and cutting jobs.
Greencore, which makes sandwiches and sushi for supermarkets and chains including Starbucks and Caffe Nero, said revenue rose by around a fifth to £926m in the six months to the end of March.
Around 14.5pc of the jump came from cost inflation "recovery" as the company passed on higher costs to consumers.
The Dublin-based firm also revealed it cut around 250 jobs by the end of March as it stepped up its cost-cutting programme.
However, the food giant swung to a pre-tax loss of £6.2m from a £1 million profit the prior year due to higher costs and as rising interest rates impacted its debt.
12:05 PM
Pound rises but inflation remains in focus
The pound has risen against a weaker dollar this morning, but persistent inflation remains in focus ahead of a quiet week for economic data.
Investors have a close eye on moves in the dollar as a deal to raise the US debt ceiling faces its first test in Congress. The yen also rose after an impromptu meeting of Japan's finance ministry and central bank.
Data last week showed UK inflation fell in April, but by less than expected, maintaining pressure on the Bank of England to keep lifting interest rates.
In a further sign of sticky price rises, data from the BRC this morning showed shop price inflation hit a new record high of 9pc in May.
The pound rose 0.5pc against the dollar to $1.241. Against the euro it was up 0.4pc at 86.39p.
11:51 AM
Elon Musk touches down in China for first time in three years
Elon Musk's private jet has touched down in Beijing as the billionaire embarks on his first trip to China in three years.
Our tech editor James Titcomb has more details.
11:34 AM
EU chief to meet OpenAI boss Sam Altman
European Commission President Ursula von der Leyen will meet the chief executive of OpenAI, Sam Altman, later this week amid a growing threat of regulation.
Mr Altman last week said the ChatGPT maker might leave Europe if it won't be able to comply with the bloc's upcoming AI regulations.
The planned legislation could be the first relating to AI amid growing concerns in the creative industries about copyright breaches. But Mr Altman has warned about the risk of "over-regulating".
A commission spokesman said the meeting will take place on Thursday.
11:18 AM
Nvidia on track to become first $1 trillion chipmaker
Nvidia is set to become the first $1 trillion market capitalisation amid booming potential for artificial intelligence.
Shares in the US company jumped as much as 4pc in pre-market trading, pushing its valuation above $1 trillion.
That would make it one of five US companies in the exclusive club, joining Amazon, Alphabet, Apple and Microsoft. Only nine companies globally have ever reached that level.
The milestone reflects continued interest in anything AI-related. Nvidia this morning unveiled a deal with WPP to use the technology to help produce adverts.
10:57 AM
ITV shares sink after Philip Schofield row
Shares in ITV have sunk to a five-month low amid a deepening row over Philip Schofield.
The presenter, who fronted This Morning with Holly Willoughby, resigned on Friday, admitting to an "unwise but not illegal" relationship with a younger colleague.
The scandal has raised questions about abuse of power and the culture within ITV, as well as how much boss Carolyn McCall knew about the affair.
Eamonn Holmes, a former presenter on the show, accused the broadcaster of a "total cover-up", saying top bosses knew what was going on but failed to take action.
ITV said it had investigated rumours of a relationship between the 61-year-old star and the young worker in 2020, but that both parties had denied the allegations.
10:36 AM
Shop inflation hits new record as coffee and chocolate prices jump
Shop price inflation has hit a new record high, fuelling concerns that the Bank of England's action to address the crisis is falling short.
Hannah Boland has more:
Prices were up 9pc in the year to May compared to 8.8pc in the year to the end of April, according to the British Retail Consortium-NielsenIQ Shop Price Index.
Sharp rises in the cost of chocolate and coffee helped push shop price inflation to its highest level in at least 18 years.
The figures come after shock inflation figures last week showed prices continue to rise faster than economists had expected.
City analysts tore up their forecasts for interest rates last week on the back of the shock figures and now believe the Bank of England will be forced to take rates to 5.5pc to curb inflation.
The BRC figures show food inflation overall slowed slightly to 15.4pc in May, down from 15.7pc a month earlier.
10:17 AM
Canary Wharf debt downgraded as property woes deepen
Moody's has downgraded debt issued by the company behind Canary Wharf in the latest sign of troubles in the global real estate market.
The London financial district, which is owned by Brookfield Asset Management and Qatar's sovereign wealth fund, has more than £1.4bn of debt coming due in 2024 and 2025.
Moody's said the company would likely be reliant on asset sales and potentially shareholder support to help it de-leverage and refinance.
It downgraded Canary Wharf Group Investment Holdings to Ba3 from Ba, citing the “difficult operating and funding environment for real estate companies” that it expects to persist for at least the next year.
09:57 AM
European gas prices jump again as solar hits record
European natural gas prices have dropped to their lowest level in more than two years as demand was further hit by record solar power in Germany.
Gas posted its longest stretch of weekly declines since 2007 on Friday – a sharp reversal from the energy crisis that took prices to unprecedented levels last year.
The slide looks unlikely to end anytime soon, with industries struggling amid a weak economic environment. That's being compounded by high renewables production, with Germany setting a record for solar over the weekend.
Benchmark prices tumbled as much as 4.3pc this morning.
09:41 AM
Economists forecast fall in migration
Economists reckon the number of foreigners arriving in the UK will fall from its record high, marking a boost to Rishi Sunak's pledge to cut immigration before the next election.
Net migration surged to 606,000 last year, deepening disquiet in the Conservative Party amid Brexit pledges to take back control of the country's borders.
However, economists say the jump in migration from outside the EU will be short-lived. The Office for Budget Responsibility expects migration to average around 265,000 a year before settling at roughly 245,000 from 2028.
Jonathan Portes, professor of economics and public policy at King's College London, said: “The increase in non-EU migration is driven by several different factors, some transitory: students, work visas, the special visa schemes for those coming from Ukraine and Hong Kong, and those applying for asylum.”
09:27 AM
How London became the most expensive city in Europe for tourists
At Mayfair’s luxurious Indian restaurant Benares, this week should have been a time for celebration.
“Our Michelin plaque has just arrived,” Sameer Taneja says proudly. It marks the second time the executive chef – regarded as one of London’s most exciting culinary names – has retained the accolade of one Michelin Star.
But Taneja has other things on his mind. “The owner is having to take a hit on some of our dishes,” he admits.
Benares, like other high end restaurants, has not been immune from soaring food costs. Taneja has been loath to pass higher prices on to customers over fears they could deter some from coming altogether.
Here's more from Hannah Boland.
09:15 AM
Musk lands in China
Elon Musk has reportedly landed in China in his first trip to the country in three years, where he is expected to meet senior Chinese officials and visit Tesla's Shanghai factory.
A Chinese foreign ministry spokesman welcomed the billionaire and other business leaders today. His private jet landing in Beijing was reported by Reuters.
Asked about Mr Musk's visiting the world's second largest economy and possibly meeting senior Chinese officials, Mao Ning said: "We would like to see foreign investors operate in China."
08:59 AM
Nestle and Unilever seek new finance chiefs amid inflation pressures
Nestle and Unilever are appointing new chief financial officers, underscoring a changing of the guard at consumer-goods companies as inflation pressures the industry.
Nestle said Anna Manz, the finance boss of the London Stock Exchange Group, will take over from Francois-Xavier Roger when she is released from her current role.
Unilever's veteran CFO Graeme Pitkethly plans to retire by the end of May next year after 21 years at the company.
He will be working with a new chief executive starting in July as Royal FrieslandCampina's Hein Schumacher takes over from Alan Jope.
Others in the industry like Reckitt Benckiser and Carlsberg are also hiring new bosses. The changes come as the industry faces an existential challenge from a cost-of-living crisis that is forcing shoppers to tighten their belts and trade down to unbranded products.
08:44 AM
Hollywood Bowl revenues hit record as families seek affordable entertainment
Hollywood Bowl has posted lower half-year profits but said sales have remained resilient as Britons look for affordable entertainment amid cost pressures.
The 10-pin bowling operator reported pre-tax profits of £26.7m for the six months to March 31, down from £33.4m a year ago.
But it said with the trading boost a year earlier from the temporary VAT reduction stripped out, profits lifted 7.7pc to £24.8m.
It saw like-for-like sales rise 3.5pc and notched up record revenues of £110.2m over the half year.
The group said it remains aligned with full-year profit guidance and on track for new openings, with plans for at least three a year, saying it is "confident in resilient demand as customers look for value-for-money leisure experience".
It has also seen visitors spend more money on snacks and sharer foods after introducing a simpler food menu, with comparable sales up 9pc for food and 1.7pc for drinks over the first half.
08:29 AM
WPP jumps as it unveils Nvidia partnership
The FTSE 100 opened lower after a long weekend, with investors avoiding big bets on fresh worries over the US debt deal, while advertising firm WPP logged its best day in over three weeks on its partnership with chipmaker Nvidia.
World's largest advertising group WPP jumped as much as 2.9pc after announcing its partnership with US-based chipmaker Nvidia Corp to build generative AI-enabled content for digital advertising.
The broader media sector housing the stock rose 0.4pc.
The internationally-focused FTSE 100 was down 0.3pc, after a few US Republican lawmakers said they would oppose the deal to raise the United States' debt ceiling.
The mid-cap FTSE 250 ticked 0.2pc higher.
Bunzl dropped as much as 1.1pc after the business supplies distributor said it would acquire a safety business in Brazil and Spain.
Purplebricks Group surged as much as 8.5pc after the online estate agent said it had received an indicative takeover proposal from top shareholder Lecram Holdings for £1.5m in cash.
08:22 AM
Asda's £2.3bn EG deal to create 'consumer champion'
Today we've had confirmation of the mega-deal for Asda to buy the UK and Ireland business of EG Group, which runs 350 petrol stations, for £2.3bn.
Asda chairman Stuart Rose said:
Asda's acquisition of EG UK and Ireland will create a consumer champion like the UK has never seen.
Throughout my career in retail one thing has always been true, that meeting the evolving needs of customers is the route to growth.
This transaction is all about driving growth by bringing Asda's heritage in value to even more communities and accelerating the growth of its convenience retail business.
08:05 AM
Mixed start for markets in London
It has been a mixed start to the week on the markets amid uncertainty over the US debt ceiling talks.
The internationally-focused FTSE 100 has fallen 0.3pc after the open to 7,605.68 while the midcap FTSE 250 has risen 0.1pc to 18,807.89.
08:00 AM
Goldman Sachs increases outlook for core inflation in UK
Goldman Sachs still believes inflation will fall to 4.7pc by the end of this year, but has revised up its end-2024 headline inflation projection to 3.2pc, from 2.7pc.
Economics editor Szu Ping Chan has the details:
The investment bank said inflation would not hit 2pc until the final quarter of 2025. Core inflation, which strips out volatile prices movements in food and energy, was also revised up for the next two years.
Ibrahim Quadri, UK economist at Goldman, warned that inflation, which has remained above the Bank's target since August 2021, had started to impact a number of goods and services.
He said: "We found that sequential core goods pressures have historically tended to be very sticky, suggesting that near-term pressures may remain elevated for a while."
Politicians are also concerned about rising food prices. Rishi Sunak is planning to ask retailers to agree to maximum prices for some basic goods such as bread and milk in an effort to lower food prices and tackle inflation.
However, economists have warned that any plan for "1970s-style" price caps will lead to food shortages amid a backlash from cabinet ministers and supermarkets.
07:38 AM
UK shop price inflation hits new record
Prices in UK stores are rising at a record pace as the cost-of-living crisis shows little sign of easing.
Shop price inflation - the cost of items in stores - accelerated to 9pc this month, a new peak for an index that started in 2005, the British Retail Consortium (BRC) said. That is an increase from 8.8pc in April.
Food inflation decelerated to 15.4pc in May, down from 15.7pc in April, according to the BRC. Lower energy and commodity costs meant lower prices on staples including butter, milk, fruit and fish.
Mike Watkins, head of retailer and business insight at NielsenIQ, which produces the data for the BRC, said: "To help mitigate the impact of inflation, shoppers are saving money by looking for seasonal promotions on the high street and taking advantage of the price reductions offered by supermarket loyalty schemes."
It comes after the Office for National Statistics put the figure for food price inflation at 19pc last week, close to the highest rate in more than 45 years.
07:28 AM
Issa brothers merge UK petrol station empire with Asda in move to slash debt
Asda owners the Issa brothers have confirmed the £2.3bn merger of the supermarket with their EG Group petrol station business in Britain.
The agreement will create a UK shopping behemoth, with the brothers describing the deal as a "transformational step".
The proceeds from the tie-up will be used to repay debt, along with $1.4bn (£1.1bn) from a recent sale and lease back deal in the US.
EG Group will continue to operate in the USA, Australia, Germany, France, Italy, the Netherlands, Luxembourg and Belgium, whilst also retaining about 30 UK sites
Zuber Issa, co-founder and co-chief executive of EG Group, said:
This transaction with Asda represents an important strategic step for EG Group.
Following this sale, EG Group will benefit from a significantly strengthened balance sheet, supporting the continued roll out of its successful convenience retail, fuel and foodservice strategy and drive innovation to transform the consumer experience.
This includes the ongoing investment and expansion of our EV charging business, evpoint, as well as hydrogen and other sustainable fuel retail infrastructure, which we continue to see as a significant future opportunity.
I am confident the UK&I business will go from strength to strength under Asda's ownership. Over the last 22 years we have built a business that I am extremely proud of, and EG Group will continue to maintain an important base in the UK, supporting the global business from our home in Blackburn.
The Issa brothers bought Asda from Walmart for £6.8bn in 2021, bringing the supermarket back under British control.
07:05 AM
Ron DeSantis claims US 'careening towards bankruptcy' ahead of crunch debt ceiling vote
A handful of hard-right Republicans said they would oppose the deal to raise the $31.4trn (£25.5trn) debt ceiling, highlighting the dangers of the US suffering a "catastrophic" default.
Conservatives have criticised the agreement between Joe Biden and House Speaker Kevin McCarthy for falling short of the deep spending cuts they wanted.
Meanwhile, liberals have bemoaned policy changes such as new work requirements for older Americans in the food aid program.
Florida Governor Ron DeSantis, a candidate for the Republican 2024 presidential nomination, said the deal does not do enough to change the fiscal trajectory.
He told Fox News: "After this deal, our country will still be careening toward bankruptcy."
President Biden said he "feels good" about the debt ceiling deal which will be considered by the House Rules Committee this afternoon before a vote on sending it to the full House for a vote expected Wednesday.
US Treasury Secretary Janet Yellen has warned of the "catastrophic" consequences of a deal not being passed, which could mean the US runs out of money as soon as June 1 and could default on its debts.
Treasuries and US stocks rallied in pre-market trading amid hopes that Congress will pass a debt-accord to head off a default as White House and Republican congressional leaders stepped up lobbying in support of the deal.
Near-maturity Treasury bills were boosted in Asian hours as trading resumed after the US markets were closed for Memorial Day. More broadly, Treasury yields declined across the curve on debt dated from five years to 30 years.
Contracts on the S&P 500 and Nasdaq 100 rose 0.3pc and 0.4pc, respectively. European futures made small gains and the picture across Asian equity markets was mixed.
The dollar, which has benefited from angst around the statutory borrowing limit, slightly fell, with an index of greenback sitting comfortably below the two-month high set last week.
06:55 AM
Good morning
Joe Biden's deal to raise the US debt ceiling still faces challenges despite the President saying he "feels good" about the prospects for the plan to get through Congress before America runs out of money.
Florida Governor Ron DeSantis, a candidate for the Republican 2024 presidential nomination, aligned himself with hard-right members of his party who plan to vote against the proposals.
He told Fox News: "After this deal, our country will still be careening toward bankruptcy."
5 things to start your day
1) Labour warned off meddling in the retirement funds of millions | Schroders chief executive Peter Harrison calls for wholesale change to unlock Britain's full potential
2) British households will have to cut energy use again, says National Grid | Preparations for second winter without Russian gas signal energy crisis is not yet over
3) Amazon recruits Evri amid Royal Mail delivery woes | Royal Mail struggles to meet performance targets in wake of union disputes
4) How London became the most expensive city in Europe for tourists | The cost of shopping, eating and moving around the capital soars above rivals
5) How a tech mogul’s murder exposed Silicon Valley's underbelly of sex and drugs | San Francisco's tech boom has fuelled a culture of debauchery known as ‘The Lifestyle’
What happened overnight
Asian shares were mixed in directionless trading following a US holiday, as optimism about a deal on America's debt was dented by worries about the regional economy.
Japan's benchmark Nikkei 225 lost 0.4pc in morning trading to 31,119.27. Australia's S&P/ASX 200 was little changed, inching up less than 0.1pc to 7,218.60. South Korea's Kospi added 0.9pc to 2,581.89. Hong Kong's Hang Seng dipped 0.5pc to 18,458.25, while the Shanghai Composite lost 0.6% to 3,202.41.
Analysts say investors remain concerned about the a possible "second wave" of Covid-19 cases in China, although the economic impact is expected to be more limited than from the earlier pandemic wave.
China's recovery from virus-related disruptions during the past several years appears to be faltering, adding to worries over the regional economy.
