U.S. stock futures shot higher on the final trading day of the year after Senator Bob Corker expressed some optimism that a budget deal could be reached sometime today as lawmakers in Washington scrambled to strike a last-minute deal to avert the "fiscal cliff."
"The discussions are going very well… I do think there's going to be a resolve to this," said Corker on CNBC. "It's almost irrelevant when it happens, it's going to happen and it's probably going to happen today."
Negotiations are expected to continue between lawmakers and the White House on how to deal with the $600 billion in automatic tax hikes and spending cuts that kick in at the start of January and could drag the economy in recession. The Senate reconvenes at 11 a.m. ET to resume talks with only a few hours left to forge a deal that would also have to be passed by the House of Representatives.
While hope for a broad deal has largely evaporated, the lack of panic on markets shows that investors still expect officials to find a solution to the budget problems early in the New Year. The measures that kick in on Jan. 1 will have only a gradual impact.