U.S. stock futures drop as government shutdown begins
U.S. stock index futures extended losses early Wednesday as the federal government entered a shutdown. Lawmakers failed to pass new funding, forcing agencies to close.
Wall Street was also pressured by hawkish remarks from Federal Reserve officials. Dallas Fed President Lorie Logan signaled caution on future interest rate cuts, dampening market sentiment.
By 00:05 ET, S&P 500 Futures slipped 0.4% to 6,709.50, while Nasdaq 100 Futures lost 0.5% at 24,775.25. Dow Jones Futures declined 0.4% to 46,501.00.
The weakness followed a strong Wall Street session on Tuesday, where gains in technology and optimism around artificial intelligence fueled record highs for the Dow Jones.
Government shutdown triggered after Senate rejects funding bill
The shutdown began at midnight Tuesday after a Republican-backed funding bill failed in the Senate. The measure, which had earlier passed the House, fell short in a 55-45 vote, below the 60 votes required. Senate Democrats opposed the bill, demanding the continuation of healthcare subsidies.
The closure is set to disrupt services from air traffic control to disaster relief, while thousands of federal workers face furloughs. Friday’s nonfarm payrolls report may also be delayed.
President Donald Trump added pressure by threatening further layoffs if the shutdown drags on. Historically, shutdowns have had limited impact on stock markets, but they weigh on broader economic activity and the job market.
Wall Street closes Q3 on strong note despite shutdown risks
Despite concerns, U.S. stocks ended Tuesday near record levels. The S&P 500 rose 0.4% to 6,688.44, while the Nasdaq gained 0.3% to 22,660.01. The Dow Jones added 0.2% to close at 46,397.89, marking another record high.
Technology stocks led the rally on strong AI demand, while airline shares fell on shutdown fears.
For the third quarter, the S&P 500 gained 7.8%, the Nasdaq jumped 11.2%, and the Dow advanced 5.2%. All three indexes marked a series of record highs.
