Investing.com -- Stocks rallied late Thursday on optimism about a debt ceiling deal in Washington. House Speaker Kevin McCarthy said he was hopeful that congressional negotiators would sew up a deal for a vote next week, as President Joe Biden was in Japan meeting with world leaders at the G-7 summit. Lawmakers have been trying to hammer out a deal before early June, when Biden administration officials have warned the U.S. could run out of options to keep paying obligations, such as interest on debt. The prospect of a default has weighed on the markets, though top lawmakers have pledged they wouldn't get to that point. The drama is unfolding as the Federal Reserve heads into its June meeting with expectations, at least from futures traders, that it will hit pause on further interest rate increases. Some futures traders are also seeing the possibility that the Fed could start cutting rates later this year, especially if economic conditions weaken enough to tip the U.S. into a recession. Still-tight labor market data could complicate the Fed's calculations. On Thursday, new jobless claims were lower than expected and had fallen from the prior week. The Fed will get the jobs report for May and new inflation data before starting its meeting in June. Here are three things that could affect markets tomorrow: 1. Fed speakers Fed Chair Jerome Powell is expected to participate in a panel discussion with former Fed Chair Ben Bernanke at a conference in Washington, D.C. at 11:00 ET (15:00 GMT). 2. Deere earnings Agricultural and construction equipment maker Deere & Company (NYSE:DE) is expected to report earnings per share of $8.53 on revenue of $14.86 billion. 3. Foot Locker The apparel and footwear retailer Foot Locker Inc (NYSE:FL) is expected to report earnings per share of 78 cents on revenue of $1.99B.