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Wall Street stocks struggled to advance on Monday, as the Federal Reserve’s “higher for longer” interest rate strategy continued to pile on pressure as a US government shutdown loomed.
Futures on the S&P 500 (^GSPC) and the Dow Jones Industrial Average (^DJI) futures traded around the flatline, after losing grip of earlier gains as 10-year Treasury yields (^TNX) jumped. Nasdaq 100 futures fell about 0.1%.
Oil prices have resumed their rally, and so the prospect of inflation staying high — and that has fired up debate about whether the Fed will find itself restricted from cutting rates in the near term. Investors are now getting ready for a fresh read on PCE inflation due out Friday for more insight.
Read more: What the Fed rate-hike pause means for bank accounts, CDs, loans, and credit cards
With less than a week left to avert a government shutdown, investors are starting to assess its potential impact on the economy, given there’s little sign of progress on a budget agreement by lawmakers. A reading on second-quarter GDP is scheduled for Thursday.
Meanwhile, Sunday’s tentative deal to end the Hollywood writers’ strike has lifted media stocks, with Warner Bros. Discovery (WBD) shares up 4% in premarket trading. But there’s less optimism around the autoworkers’ strike, after Ford (F) said despite progress in some areas, there are “significant gaps to close” before it can reach a new labor agreement with the UAW.
Elsewhere, signs of growing debt woes at Chinese property developers — Evergrande, in particular — rattled nerves about the impact on the world’s second-biggest economy.
In individual stocks, Amazon has signed a deal to invest up to $4 billion in startup Anthropic, pulling in a crucial partner in its push to become a major player in AI.
Eyes are also on Booking Holdings (BKNG), whose brands include Booking.com and Priceline, after its proposed $1.7 billion buy of ETraveli was blocked by the EU antitrust regulator.
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KStock futures point slightly lower
The major US stock benchmarks were trading flat, but shaping up to begin the last week of a tough month in the red, as focus stays firmly on the Fed’s hawkish outlook for interest rates.
Dow Jones Industrial Average (^DJI) futures were down 0.06%, or 15 points, while S&P 500 (^GSPC) futures slipped 0.05%. Nasdaq 100 futures dipped 0.08%.
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