Stock futures were set to start the new quarter broadly unchanged on Monday, after US lawmakers averted a government shutdown and as Wall Street weighed a downbeat forecast for China’s economic growth.
Futures on the S&P 500 (^GSPC) and the Dow Jones Industrial Average (^DJI) lost hold of earlier gains to trade around the flatline. The tech-heavy Nasdaq 100 (^NDX) was more firmly higher, up 0.17%.
In a surprise turnabout, Congress on Saturday sealed a last-second deal to sidestep a shutdown that had seemed all but inevitable. That brought some relief to investors concerned by the threat of significant harm to the economy and stock market. But as the agreement brought just a temporary extension to the budgetary wrangling, the relief could be just as short-lived.
For one thing, the major gauges still face other headwinds that helped drag stocks to sharp losses for the quarter and month on Friday, with the Federal Reserve’s message that rates will stay higher-for-longer ringing in investors’ ears. Oil prices and Treasury yields (^TNX) are still rising, and piling on pressure.
But the US funding deal could fuel expectations that the Fed will hike rates in November, some traders believe. Food for thought on that could come when the central bank’s chair, Jerome Powell, takes part in a roundtable discussion with Philadelphia Fed President Patrick Harker later Monday.
Read more: What the Fed rate-hike pause means for bank accounts, CDs, loans, and credit cards
Elsewhere, the World Bank slashed its outlook for China’s growth in 2024, even as it kept its forecast for 2023 unchanged, sparking worries about demand in the world’s second-biggest economy. The bank pointed to its failure to fully recover from the pandemic impact and the ongoing debt crisis in its property sector.
Still hanging over markets is the United Auto Workers strike, which was extended to more Ford and GM plants on Friday. Auto companies are set to report deliveries for the quarter later this week, and the figures will be closely watch to gauge the impact of the walkouts. A deal between the UAW and Mack Trucks in their dispute on Sunday could provide reason for optimism.
Meanwhile, investors are counting down to the week’s data highlight, the September US jobs report on Friday. Updates on US manufacturing from ISM and S&P Global are on Monday’s docket.
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KStock futures broadly steady to kick off new quarter
Tech stocks pointed to a slightly higher open on Monday, as the other major gauges traded just above the flatline, after US lawmakers pulled out an unexpected last-minute deal to avert a government shutdown at the weekend.
Futures on the S&P 500 (^GSPC) were up 0.02%, while those on the Dow Jones Industrial Average (^DJI) dipped 0.04%, or 12 points. Contracts on the tech-heavy Nasdaq 100 were up 0.17%.
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