World shares declined Thursday as investors watched for signs of progress on a deal to avert a default on U.S. government debt.

U.S. futures were mixed and oil declined.

Germany slipped into recession as its economy contracted 0.3% in the first quarter of the year. The data from the Federal Statistical Office showed a second quarter of contraction, which is one definition of recession.

The figures were a blow to the German government, which last month boldly doubled its growth forecast for this year after a feared winter energy crunch failed to materialize. I

In Frankfurt, the DAX lost 0.5% to 15,767.10 while the CAC 40 in Paris slipped 0.3% to 7,229.45. Britain's FTSE gave up 0.3% to 7,601.55.

The future for the S&P 500 gained 0.5% while that for the Dow Jones Industrial Average was down 0.3%.

Tokyo was one of the few markets that advanced. Investors have been betting on higher returns from Japanese companies , taking advantage of the dollar's strength against the Japanese yen.

The benchmark Nikkei 225 index advanced 0.4% to 30,801.13.

Hong Kong's Hang Seng sank 1.9% to 18,746.92 on worries China's economic recovery after the government relaxed pandemic restrictions late last year is losing steam. The Shanghai Composite index edged 0.1% lower to 3,201.26.

Simmering tensions between China and the United States over technology and security have added to uncertainties for markets in the region.

In Seoul, the Kospi shed 0.5% to 2,554.69, while Australia's S&P/ASX 200 gave up 1.1% to 7,138.20. India's Sensex declined 0.4%.

Taiwan's benchmark Taiex jumped 0.8% on gains for major computer chip makers. Taiwan Semiconductor Manufacturing Co., the world's largest, surged 3.4%.

On Wednesday, the S&P 500 lost 0.7% after House Speaker Kevin McCarthy said Republicans and Democrats remain far apart in talks on raising the debt ceiling to prevent a potentially disastrous default on the U.S. government’s debt.

The Dow Jones Industrial Average dropped 0.8% and the Nasdaq composite lost 0.6%.

The main U.S. stock index is on track for its worst week in more than two months as the once-unthinkable creeps closer to possibility. Minutes from the Federal Reserve’s latest meeting showed policy makers are split on whether to keep raising interest rates.

The U.S. government could run out of cash to pay its bills as soon as June 1 unless Congress allows it to borrow more. The widespread belief on Wall Street is that Congress will come to an agreement at the 11th hour, as it’s done several times before, because a default would benefit no one and could cause tremendous disruptions to the economy and financial markets.

“As the early-June deadline ticks closer, only a concrete resolution may provide the much-needed conviction for markets rather than verbal reassurances, with the lingering risks of a continued impasse still keeping sentiments on a cautious tone,” Yeap Jun Rong of IG said in a commentary.

The stock market has remained mostly resilient. Fear has so far been concentrated in the bond market, where prices have dropped for Treasury bills due to pay out around the date of a possible default.

Interest rates are so high because the Federal Reserve has yanked them up at the fastest pace in decades to try to bring inflation under control.

Traders are hopeful just one more hike may be on the way this summer, if any at all. Federal Reserve officials were divided earlier this month on whether to pause their rate hikes at their upcoming meeting in June, according to the minutes of their latest meeting.

In other trading Thursday, benchmark U.S. crude oil dropped 61 cents to $73.73 per barrel in electronic trading on the New York Mercantile Exchange. It gained $1.43 on Wednesday, to $74.34 per barrel.

Brent crude, the standard for international trading, slipped 52 cents to $77.69 per barrel.

The U.S. dollar was barely changed at 139.42 yen. The euro fell to $1.0733 from $1.0754.