Investors will be waiting for an update on the U.S. debt ceiling this week, and comments from the Fed will be closely listened for clues where interest rates are headed.

Stock Market

Data released on Friday that revealed a sharper-than-anticipated decline in consumer confidence in the United States contributed to concerns that political wrangling over extending the debt ceiling might lead to a recession.

A combination of worries over the debt limit conflict and monetary policy caused U.S. stock markets to close last week mostly down, with the Dow Jones down 1.1%, the S&P 500 down 0.3%, and the Nasdaq up 0.4%.

The question of whether the central bank would stop raising interest rates next month as was largely anticipated was made more ambiguous by statements made by Fed members on Friday.

The Fed hinted earlier this month that it would postpone additional rate increases as it evaluates the effects of its previous tightening and the ongoing stress on the banking sector on lending and credit.

In the next week, further companies will report their earnings, including Cisco Systems, Walmart, and Home Depot.

UK & Eurozone

On Tuesday, the Eurozone is scheduled to reveal updated first-quarter GDP figures. According to experts' projections, the Eurozone's economy grew by just 0.1% in the three months leading up to March. In addition, other analysts think that the current state of stagnation may eventually lead to a recession this year.

On the same day, the more prognostic ZEW Institute surveys of business conditions and sentiment in Germany, the largest economy in the area, will be made public.

The salary component data of Tuesday's employment report will be eagerly scrutinised in the UK, where inflation is still double digits. The BoE has stated that the release of the wage and inflation figures before its June meeting will determine whether or not rates be raised once again.

US Debt Worries

Investors are feeling the pressure of a possible June 1st U.S. default due to the impasse in Congress over extending the borrowing ceiling.

If Congress does not raise the amount of debt the nation is legally permitted to take on, the United States faces a "significant risk" of defaulting during the first couple of weeks of June, the Congressional Budget Office said on Friday.

The $31.4 trillion debt ceiling discussion between U.S. President Joe Biden and key senators is expected to get back up early this week after a scheduled meeting on Friday was pushed back to allow staff to continue discussions.

The IMF has cautioned that a U.S. default would certainly result in increased interest rates as well as other "very serious repercussions" for the U.S. economy and the world economy.

Federal Reserve speakers & more data

The scheduled appearances of numerous central bank officials in the coming days will be eagerly observed because investors fear that the Fed's rapid rate rises might send the economy into recession.

Michael Barr, the Fed's vice chair for supervision, will speak before Congress on recent strains in the banking industry and the central bank's response. Ben Bernanke and Fed Chair Jerome Powell will take part in a panel discussion on monetary policy in Washington on Friday.

On Tuesday, the United States will also disclose data for April's industrial output and retail sales. Retail sales are anticipated to increase. On Thursday, the weekly data on jobless claims is expected.