Stock futures fell Tuesday as a potential U.S. government shutdown loomed. Despite the latest declines, Wall Street was headed for an unusually strong September.
Futures tied to the Dow Jones Industrial Average fell 109 points, or 0.2%. S&P futures slipped 0.2% along with Nasdaq-100 futures
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Although shutdowns aren’t usually market-moving events, this time could be different as investors are already wary about a slowing labor market, the risk of stagflation and elevated stock valuations. A shutdown could also prompt rating agencies to rethink the condition of U.S. credit, which was downgraded in May by Moody’s.
After a meeting between President Donald Trump and top Democrats and Republicans, Vice President JD Vance said Monday evening: "I think we’re headed to a shutdown because the Democrats won’t do the right thing."
The Labor Department also announced Monday that the September nonfarm payrolls report scheduled to release Friday will not come out if the U.S. government suspends operations. The report is one of several upcoming key data releases that will provide crucial information about the direction of the economy ahead of the Federal Reserve’s upcoming October policy meeting. Exacerbating concerns over the shutdown was President Donald Trump’s threat over the weekend that a shutdown could result in mass firings of federal workers.
Major U.S. stock indexes continue to hover near record highs ahead of the final September session. The S&P 500 has increased more than 3% this month, while the Dow Jones Industrial Average has gained 1.7%. The tech-heavy Nasdaq Composite has outperformed the other two benchmark indexes with a roughly 5.3% gain in September.
Tuesday will also bring the end of the third quarter. The broad-based index is up 7.4% quarter to date, while the Nasdaq is set to notch a nearly 11% quarterly gain. The Dow is up 1.7% over the three-month period, which would mark its fifth positive quarter in a row.
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