The U.S. House of Representatives Speaker John Boehner called off a vote on Thursday to raise taxes for wealthy Americans in a proposal dubbed "Plan B," bringing the country on the brink of going over the "fiscal cliff."
A series of tax increases and spending cuts are expected to kick off on January 1, if lawmakers don't reach a compromise and this could push the U.S. economy into a recession.
But analysts told CNBC they expect a "Plan C" within a few days that would help U.S. avert a fiscal crisis.
"I'm sure a 'Plan C' will materialize over the next few days, there's time for things to be renegotiated, and 2013 will be in better shape for equity markets," said Jim McCafferty, managing director and co-head of equity research with CIMB Securities in Hong Kong.
Soon after the vote was called off, the House went into recess until after Christmas. Reacting to the news stock futures immediately sank, but then recovered some lost ground. (Click here for the latest premarket prices.)
In Asia as well, stocks gave up their earlier gains.
Boehner said Thursday that he had failed to gather support among Republicans for "Plan B" that proposed raising taxes only on families earning more than $1 million. This plan is opposed by the White House, which favors raising taxes on families earning more than $400,000, instead of the $250,000 cited during President Barack Obama's successful campaign for a new term.