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U.S. stock index futures edged lower on Tuesday, as investors weighed the growing likelihood of a government shutdown and a fresh wave of trade tariffs, while also positioning ahead of the release of key labor market data.
At 06:10 ET (10:10 GMT), Dow Jones Futures slipped 110 points, or 0.2%, S&P 500 Futures fell 13 points, or 0.2%, and Nasdaq 100 Futures declined 45 points, or 0.2%.
Wall Street’s Performance and Quarter-End Snapshot
The main U.S. indices closed higher on Monday, supported by continued enthusiasm for artificial intelligence and expectations that the Federal Reserve will deliver further rate cuts this year.
- The S&P 500 has climbed more than 3% in September and is on track for a 7.4% quarterly gain.
- The Nasdaq Composite is set to add nearly 11% this quarter, outpacing other benchmarks thanks to strength in technology stocks.
- The Dow Jones Industrial Average is up 1.7% for September and the quarter, poised to notch its fifth consecutive positive quarter.
Shutdown Threat Poses Risks
The U.S. government faces a shutdown at midnight Tuesday unless Congress passes a funding extension.
- Vice President JD Vance said Monday that a shutdown “appeared likely” after a White House meeting with President Donald Trump and bipartisan leaders yielded little progress.
- The stalemate centers on healthcare and social welfare spending, with Democrats demanding expanded benefits and Republicans insisting such issues be handled separately.
While past shutdowns have had limited direct impact on corporate earnings, they have disrupted economic activity. The Congressional Budget Office estimated the 35-day shutdown in late 2018 to early 2019 cut $11 billion from GDP.
Crucially, a shutdown this week could delay Friday’s release of nonfarm payrolls data, a report closely watched by the Fed and markets to assess labor market conditions and guide interest rate policy.
Tariffs Add to Investor Concerns
Adding to uncertainty, President Trump announced a new round of tariffs late Monday:
- 10% on softwood lumber and timber
- 25% on kitchen cabinets and vanities
- 25% on upholstered wooden products
These levies, set to take effect October 14, come on top of the administration’s earlier 100% tariffs on pharmaceuticals and other targeted trade measures.
Trump’s team has defended the tariffs as essential for protecting U.S. manufacturing and reducing reliance on imports, though critics warn they risk higher consumer prices and further global trade tensions.
