If an agreement is reached to increase borrowing limit from USAfund managers may cut their positions in the technology sector, which was seen as a safe haven, and decide to turn to the rest of the market. This is something that some investors value. Investors are closely watching what is happening in Washington, looking for signs of an upcoming deal between the White House and its Republicans. Congress to raise the superpower’s borrowing limit until June 1, when it is expected to run out of cash. Signs that a deal is imminent have driven insurance contract spreads down in the event of a US government default in recent days.

They were down about 154 basis points and up about 20 basis points, according to S&P Global Market Intelligence. below last week’s levels. Randy Frederick, managing director of trading and derivatives at the Schwab Financial Research Center, believes that the borrowing limit agreement will encourage investors to return to short-term US Treasuries, which many have avoided due to the uncertainty of developments. However, in the event of a deal, investors could turn to stocks in sectors that benefit from the continued strength of the US economy, such as consumer goods, electrical appliances, automobiles and entertainment. As Randy Frederick points out, “Large-cap giants have been a good hiding place in the face of uncertainty so far, but now we expect a return to US Treasury bonds, which offer good returns, as well as other sector stocks, which remain afloat.” back”.

Of course, investors are not going to completely abandon technology stocks, since this category has been driving the market higher over the past decade. Another factor that will support technology stocks is the enthusiasm for artificial intelligence, which has already spurred some large-cap companies this year. Some will see the overall rise in stocks as a hopeful sign that the market is generally in good shape. However, the fact is that the borrowing limit is only one of the factors causing concern in the market. A default is avoidable, but concerns about how badly economic growth will suffer if the Federal Reserve continues to raise interest rates will remain.