Negotiations between the President and House Republicans have reportedly broken down.
In a close-door meeting, Speaker John Boehner said talks have hit an impasse.
A Senate bill to raise the debt ceiling through the end of the year and fund the government through March 31 was rejected, although discussions between Senate Majority Leader Harry Reid and Senate Republican Leader Mitch McConnell are ongoing.
Summing up the situation is Republican Adam Kinzinger: "It doesn't seem like the White House is serious at all about entering negotiations with us until they see what comes out of the Senate. If they get something out of the Senate that's weaker than our negotiated position, it obviously strengthens their position."
Optimism about a proposed deal lifted stocks Friday and any lack of progress over the weekend will likely weigh on the broad market in the coming week.