By Dow futures plunged 150 points on Tuesday, as investors weighed political uncertainty in Washington against lingering concerns over economic growth.
With Congress racing against a midnight deadline to avoid a government shutdown, investor sentiment grew increasingly cautious.
Fears that federal services could be disrupted and key economic reports delayed added to the market’s jitters, feeding the prospect of higher volatility.
Traders also kept a close watch on Treasury yields and recent Fed signals for any hints on the path of interest rates into the final quarter of the year.
The standoff in Washington, coupled with softer consumer trends and concerns over global growth, left Wall Street uneasy as it wrapped up a rocky September.
5 things to know before Wall Street opens
1. The US government is once again on the brink of a shutdown as lawmakers scramble to reach a funding deal before tonight’s midnight deadline.
If no agreement is struck, federal agencies will be forced to scale back operations, with thousands of workers facing furloughs and services like economic data releases put on hold.
The uncertainty has rattled investors, who worry about the fallout for markets and policy decisions already clouded by slowing growth and high interest rates.
While history shows shutdowns tend to have limited long-term impact, the latest standoff underscores deep political gridlock in Washington at a fragile moment.
2. Stocks were mostly flat in pre-market trading on September 30, with futures dipping a bit as investors stayed cautious ahead of key developments.
Tech-related names like Lam Research and Applied Materials jumped on chip sector optimism.
Overall, it was a mixed start, with some pockets of strength in tech and retail but pressure on financial and industrial stocks as traders weighed the risk of a government shutdown later today.
3. The US economy finds itself at a tricky crossroads. Growth has been steady but slowing, with consumer spending showing signs of fatigue amid rising prices and higher interest rates.
Inflation remains a concern, though it has eased somewhat from earlier peaks. The job market is strong but has started to cool, reflecting tighter monetary policy.
4. Wall Street is showing a cautious vibe as September draws to a close.
The major indexes are holding onto modest gains from the month but have hit resistance near recent highs, with futures slightly down early Tuesday.
The Dow is feeling pressure from industrial stocks dealing with geopolitical and economic uncertainty, while the tech-heavy Nasdaq remains sensitive to interest rate moves and earnings reports.
5. Global stock markets wrapped up September with a mixed bag of results. In the US, major indexes like the S&P 500 and Nasdaq marked solid gains for the month and quarter, fueled by strong corporate earnings and optimism in tech.
Europe mostly held steady, supported by solid earnings but cautious over persistent inflation concerns.
Asia was mixed too as China’s markets gained on talks of fresh policy support, while Japan’s Nikkei slipped a little.
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