Wall Street held its collective breath ahead of a White House meeting over the US debt limit standoff. Stocks fluctuated before the crucial summit Monday between President Joe Biden and House Speaker Kevin McCarthy to iron out roadblocks in negotiations over Republican demands. The S&P 500 drifted between gains and losses, the tech-heavy Nasdaq 100 advanced and yields on short-term Treasuries rose. Also of note today were China’s contention that products by Micron Technology failed a cybersecurity review and Pfizer rising on a report that its weight loss pill may be as effective as Ozempic. But the big question on investors’ minds is whether US politicians will be able to reach a deal in time to avoid a calamitous default. Treasury Secretary Janet Yellen said the chances are “quite low” that the US can pay all its bills by mid-June, while McCarthy says a deal needs to be done this week. Here’s your markets wrap. —Natasha Solo-Lyons 

The Biden administration on Monday announced a momentous deal that calls for Arizona, California and Nevada to cut their water usage by 3 million acre-feet over three years, or 13% of their allowance. The accord, years in the making, means the federal government won’t have to impose draconian cuts on the states (for now, anyway), which would have meant significant pain for farmers and cities in either Arizona or California or both. But Mark Gongloff, writing in Bloomberg Opinion, warns that—while nature gifted the western states a little extra time with record rain and snow—they might once again be failing to use nature’s gifts wisely.

A bleached “bathtub ring” on the banks of Lake Mead near the Hoover Dam last year illustrated the dire state of the Colorado River. Photographer: Justin Sullivan/Getty Images North America

Major US stock-market strategists are starting a bull-bear debate, with pessimist Michael Wilson of Morgan Stanley warning that the latest rally is a head fake, while Bank of America’s Savita Subramanian raises her 2023 target for the S&P 500 Index.

US regional banks could look to tap the investment-grade market after Charles Schwab raised $2.5 billion in bonds last week. Schwab’s debt offering may be followed by potential candidates US Bancorp, PNC Financial Services and Truist Financial, which may need to boost their debt footprints over the next three years by about $25 billion because of potentially higher requirements for total loss-absorbing capacity.

Pause? Rate cuts? Maybe not. US Federal Reserve Bank of St. Louis President James Bullard backed two more 2023 interest-rate increases. His Minneapolis colleague Neel Kashkari said that, if the central bank pauses next month, it should signal tightening isn’t over.

Neel Kashkari Photographer: Andrew Harrer/Bloomberg

China is likely to see its current Covid-19 wave peaking at about 65 million infections a week toward the end of June, according to a senior health adviser, while authorities rush to bolster their vaccine arsenal to target the latest omicron variants. Though data is hard to find, experts predicted that more than a million Chinese would die in the wave that began with Xi Jinping’s sudden lifting of precautions in December.

Facebook owner Meta Platforms was hit by a record €1.2 billion ($1.3 billion) European Union privacy fine and given a deadline to stop shipping users’ data to America after regulators said it failed to protect personal information from US security services.

Parents are suing elite schools for “indoctrinating” their kids with anti-racist policies. Combating diversity, equity and inclusion programs has become a signature issue for far-right politicians like Florida Governor Ron DeSantis, whose legislative efforts earned the state atravel warning from the NAACP. And while private schools aren’t necessarily subject to those laws, that doesn’t mean they’re immune to the culture war: some parents have voiced opposition in other ways, including by filing lawsuits.

• Jamie Dimon says be prepared for rates to go higher from here.
• China’s $23 trillion local debt mess is about to get worse.
• Bloomberg Opinion: Republicans have given up on cities.
• The man spending millions to look 18 is swapping blood with family. 
• Messi and Ronaldo lead Saudi Arabia's multibillion-dollar makeover.
• Bloomberg Opinion: New York losing to smaller cities in the talent race.
• No ID, no problem: Amazon to let you buy beer by scanning your palm.

For investors large and small, economic turbulence is creating plenty of risks. Where does the smart money go at a time like this? We asked four experts how they would invest $100,000 right now. With fears that US stocks may be overvalued, their ideas have an international flavor—from European luxury brands doing well in China, to the workhorse tech companies of Japan's more balanced stock market. There's also expert guidance on how to leverage ETFs to take advantage of the key themes. 

Photographer: Paul Yeung/Bloomberg

Get the Bloomberg Evening Briefing: If you were forwarded this newsletter, sign up here to receive it in your mailbox daily along with our Weekend Reading edition on Saturdays. 

Bloomberg Invest Summit returns to New York, June 6-8. We will have influential leaders from Nasdaq, JPMorgan, the SEC, Franklin Templeton, the WMBA, Charles Schwab, Blackrock, Goldman Sachs and many more. Register now to secure your spot.