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.
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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