Debt ceiling bill passes House, Fed expectations change, Macy's earnings: Top stories

Today's top stories: The House has passed the debt ceiling bill. Traders are now betting the Fed will pause at its next meeting. Growing concern about the consumer after Macy's slashed its outlook for the entire year.

Video transcript

BRAD SMITH: Here are three things that you need to know to start off your day, and your June. It's all changed again. The market has switched its bets for the Fed's June rates decision. The majority call is now for a pause at this month's meeting.

The move comes after Governor Philip Jefferson, seen as something of a proxy chair for-- proxy for Chair Jay Powell, rather, said, skipping an increase would give policymakers time to assess the data. Rate-hike bets slumped around 35% in the aftermath of the comments. It comes as the Fed's latest Beige Book, a broad study of economic conditions, showed economic activity appearing to stall in recent weeks.

Moving to the upper chamber. The bipartisan debt-limit deal heads to the Senate. This is after passing the House 314 votes to 117. The legislation, touted as a victory by both President Biden and House Speaker Kevin McCarthy, aims to avoid a US default, which could come as soon as June 5. That's the dreaded X-date. And McCarthy secured the votes of enough so-called hardliners to back the deal, though notably, more Democrats supported it than Republicans.

And the discretionary downturn continues. Macy's is the latest retailer to slash guidance on a choosier consumer. And it tracks with what we've been hearing from the likes of Walmart, Target, and Home Depot in recent weeks. The cut to its full-year outlook comes despite a beat on first-quarter earnings. Revenue dropped to below $5 billion from the $5.35 billion a year ago. Shares continue this year's downward trend, slumping over 30% in 2023.