White House Office of Management and Budget (OMB) Director Russell Vought acknowledged in a memo that a forced shutdown would take effect by midnight.
A government shutdown looms as the Senate failed to pass a stopgap funding bill, threatening the furloughing of several thousand federal employees. With the Senate adjourned until Wednesday morning, a shutdown will likely begin by the 12:01 a.m. deadline.
The Senate rejected a Democratic bill, designated as S.2882, to provide continued appropriations for federal agencies for fiscal year 2026, by a 47-53 vote. A Republican-proposed bill was also rejected (55-45). To clear the Senate hurdle, either bill needed at least 60 votes.
The passage of the Democrats-sponsored bill would have provided a breather until October 31, while the one put forward by the Republicans would have provided federal agencies with funding through the earlier of November 21 or the enactment of the applicable appropriations act. The primary pushback for the passage of the bill has been a lack of consensus over the Affordable Care Act (ACA) tax credits, which the Democrats sought to add as part of the stopgap bill.
Amid the developments, the SPDR S&P 500 ETF (SPY) an exchange-traded fund (ETF) that tracks the S&P 500 Index, and the Invesco QQQ Trust (QQQ) ETF, trended on the Stocktwits platform. The SPY and QQQ ETFs have risen 14.7% and 17.9%, respectively, for the year.
Retail sentiment toward the SPY ETF worsened to ‘bearish’ (33/100) by late Tuesday, from ‘neutral’ the day before. The message volume on the stream remained ‘high.’ On the other hand, the QQQ ETF continued to attract ‘bullish’ sentiment (63/100), with the positive mood accompanied by ‘normal’ message volume.
A watcher commented that the SPY could drop under $655 on Wednesday, and nosedive to the $640-ish level. Another projected an at least 2% correction by or before the end of the week.
Commenting on the development, economist Mohamed El-Erian said, “What may make this shutdown different is that the Administration has promised ‘a lot’ of firings, or what some are labeling DOGE 2.0.” He noted that the past shutdowns have been brief, given their unpopularity with voters.
In a memo sent to the heads of the executive department and agencies, White House Office of Management and Budget (OMB) Director Russell Vought acknowledged that a forced shutdown would take effect by midnight. “As such, affected agencies should now execute their plans for an orderly shutdown,” he said.
Vought also required federal employees to report for work to undertake orderly shutdown activities. “We will issue another memorandum indicating that government functions should resume once the President has signed a bill providing for appropriations,” he added.
While speaking to reporters ahead of the Senate vote, President Donald Trump warned about “irreversible” and “vast” cuts to jobs and programs. “Because of the shutdown, we can do things medically and other ways, including benefits; We can cut large numbers of people out,” he said.
“We don’t want to do that, but we don’t want fraud, waste, and abuse, and you know, we’re cutting that.”
Meanwhile, Senate Majority Leader John Thune (R-S.D.) expressed hopes for a resolution. “Democrats may have chosen to shut down the government tonight, but we can reopen it tomorrow. All it takes is five Democrats to join Republicans to pass the clean, nonpartisan funding bill that’s in front of us,” he said in a video clip shared on his X account.
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