US Government Shutdown Enters Eighth Day
As trade tensions simmered, Capitol Hill remained in the spotlight. The US Senate fell short of the 60 votes needed to pass a stopgap funding bill on Wednesday, October 8. A prolonged shutdown would likely negatively impact the US economy and raise stagflation risks. According to Kalshi, a betting platform, the US government shutdown could last 24.1 days, which would be the second-longest shutdown.
For context, the 35-day shutdown in 2018-2019 shaved an estimated $11 billion off the US economy.
Passing a stopgap funding bill will be vital, given the ongoing delays in key US economic data releases. The FOMC Meeting Minutes from September highlighted downside risks to the labor market and upside risks to inflation.
A sharp rise in US unemployment could pressure the Fed into a more dovish policy stance if inflation holds steady, lifting demand for US stock futures. Conversely, stronger-than-expected labor market data may allow the Fed to focus on inflation, potentially weighing on sentiment.
How Are US Stock Futures Moving Amid Fed Policy Uncertainties?
US stock futures posted losses in morning trading on Thursday, October 9. The Dow Jones E-mini dropped 57 points, the Nasdaq 100 E-mini fell 7 points, and the S&P 500 E-mini declined 5 points.
Later Thursday, traders should continue to monitor headlines from Capitol Hill. However, a Fed Chair Powell speech will be the main event. Powell’s tone could make or break October sentiment.
