US stock futures ticked up as Wall Street’s renewed confidence in the Federal Reserve instituting more rate cuts this year so far overshadowed a US government shutdown with no end in sight.
Futures attached to the Dow Jones Industrial Average (YM=F) hovered around the flatline while contracts attached to the benchmark S&P 500 (ES=F), and the tech-heavy Nasdaq 100 (NQ=F) rose 0.1%.
Stocks teetered throughout the day Wednesday but ended in the green, with the Dow Jones Industrial Average (^DJI) and S&P 500 (^GSPC) hitting record highs. Weak ADP jobs data confirmed signals a labor slowdown is afoot, cementing bets that more interest rates will land this year despite sticky inflation.
The jobs numbers so far distracted markets from the government shutdown, which is set to drag on at least until the end of the week. On Wednesday, the Senate again rejected both Republican and Democratic bills to fund the government. The Senate will be out Thursday in observance of Yom Kippur, making Friday the next chance to hold a vote on funding.
In the meantime, Republicans are pressuring Democrats to reopen the government and then negotiate over the expiration of healthcare subsidies at the heart of the shutdown. Democrats, however, want movement on the subsidies as a condition of funding. Reports have emerged that a bipartisan group of lawmakers are having very preliminary discussions over a possible offramp to the shutdown.
With the shutdown set to extend to Friday, the release of the September jobs report is all but certain to be delayed given the Bureau of Labor Statistics was set to completely cease operations in the event of a stoppage. The timing of the delay is in high focus for Wall Street as Fed policymakers have indicated cracks in the labor market will loom large in their next interest rate decision, which is set for the end of this month.
At the same time, the White House has indicated it plans to make good on President Trump’s threat to fire federal workers during a shutdown in the next day or two. The president has also warned that he will to use expanded powers during a stoppage to cut government programs.
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