Debt-Cap Risks Grow as Bond Traders Monitor Washington's Volatile Trading.

Despite the US being at risk of defaulting on its debt as soon as June 1, stock-market investors remain calm and there are few signs of panic. The S&P 500 Index slid 0.3% this week and the Nasdaq 100 Index rallied 0.6%. A measure of market risk, the Cboe Volatility Index, or VIX, dipped back to near a 17 level. However, some market veterans warn it may be the calm before a storm. The US economy is potentially approaching a recession after the Federal Reserve’s most aggressive monetary tightening campaign in a generation. And a crisis in the banking system is still simmering. Meanwhile, at 18.1 times profits, the S&P 500 is trading at a valuation multiple that’s above its average over the past 10 years.