U.S. stock futures tumbled on Wednesday following Tuesday’s advances. Futures of major benchmark indices were lower.
The indices dropped as the U.S. federal government officially entered a shutdown at 12:01 a.m. on Wednesday, Oct. 1, after Congress failed to reach an agreement on a spending plan.
However, historical data suggests that these events are often short-lived and have a limited long-term impact on equities.
Meanwhile, the 10-year Treasury bond yielded 4.15% and the two-year bond was at 3.60%. The CME Group’s FedWatch tool‘s projections show markets pricing a 94.6% likelihood of the Federal Reserve cutting the current interest rates in its October meeting.
| Futures | Change (+/-) |
| Dow Jones | -0.56% |
| S&P 500 | -0.65% |
| Nasdaq 100 | -0.73% |
| Russell 2000 | -0.70% |
The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, fell in premarket on Wednesday. The SPY was down 0.54% at $662.56, while the QQQ declined 0.62% to $596.66, according to Benzinga Pro data.
Cues From Last Session
Most sectors on the S&P 500 closed on a positive note, with information technology, health care, and industrials stocks recording the biggest gains on Tuesday. However, energy and consumer discretionary stocks bucked the overall market trend, closing the session lower. U.S. stocks still settled higher as the Dow Jones surged to a new closing high.
The government shutdown comes after major indices recorded gains last month; the S&P 500 gained more than 3% in September, the Dow added almost 2%, and the Nasdaq jumped 5.6% during the month.
On the economic front, U.S. job openings rose by 19,000 to 7.227 million in August from a revised 7.208 million. The Chicago Business Barometer declined to 40.6 in September from 41.5 in the previous month, compared to market expectations of 43. The S&P CoreLogic Case-Shiller Home Price Index increased 1.8% year-over-year in July.
The Dow Jones index ended 82 points or 0.18% higher at 46,397.89, whereas the S&P 500 index rose 0.41% to 6,688.46. Nasdaq Composite advanced 0.30% to 22,660.01, and the small-cap gauge, Russell 2000, gained 0.051% to end at 2,436.48.
| Index | Performance (+/-) | Value |
| Nasdaq Composite | 0.30% | 22,660.01 |
| S&P 500 | 0.41% | 6,688.46 |
| Dow Jones | 0.18% | 46,397.89 |
| Russell 2000 | 0.051% | 2,436.48 |
Insights From Analysts
The stock market successfully navigated a historically tricky September, concluding the month with a handsome gain of over 3% and continuing its recent “melt-up.”
As the calendar flips to October, and the government shutdown is a near-term hiccup for markets, …