Senate Majority Leader John Thune (R-S.C.) offered a glimmer of hope by stating that when Senate voting resumes on Wednesday, enough “reasonable” Democrats back the Republican bill, paving the way for its clearance.
U.S. stock futures fell moderately early Wednesday as sentiment soured after the government shutdown came into effect due to lawmakers’ failure to clinch a stopgap funding deal. Negative headlines surrounding the development could temper optimism even as the economy navigates through a period of uncertainty on multiple fronts.
That said, Senate Majority Leader John Thune (R-S.C.) offered a glimmer of hope by stating that when Senate voting resumes on Wednesday, enough “reasonable” Democrats back the Republican bill, paving the way for its clearance. Traders may also take heart from a surprise revenue growth reported by sportswear and accessories retail giant Nike (NKE).
As of 3 a.m. on Wednesday, the S&P 500 futures fell 0.76%, the Nasdaq 100 futures plunged 0.91%, and Dow futures were down approximately 0.65%, while the Russell 2000 futures declined a steeper 1.14%.
After a batch of mixed data and a potential government shutdown rendered the mood lackluster for much of Tuesday’s session, stocks recovered in the afternoon and closed higher for the day. The late-session recovery came amid a strong rally in healthcare stocks after President Donald Trump unveiled a plan to lower U.S. drug prices, which included a “TrumpRx” direct-to-consumer website and a pricing agreement with Pfizer.
The Dow Jones Industrial Average picked up enough momentum to close at a new high, although it could not breach its intraday peak. The rest of the major averages stopped shy of their records.
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) rose 0.38% and 0.27%, respectively. The SPDR Dow Jones Industrial Average ETF Trust (DIA) and the Shares Russell 2000 ETF (IWM) gained 0.15% and 0.14%, respectively.
For September, these ETFs logged solid gains of 3.6%, 5.4%, 2.0% and 3.2%, respectively. Carson Group’s Ryan Detrick noted that this marked the second-best September for the S&P 500 Index, going back 27 years. The gains for the month were the best in the past 15 years.
On Wednesday, traders may focus on the ADP private payrolls report for September (expected at 8:15 a.m. ET), with economists anticipating a decrease in private payrolls to 45,000 from 54,000 in August. S&P and the Institute for Supply Management will release their respective manufacturing activity readings at 9:45 a.m. ET and 10 a.m. ET, respectively. The former’s final manufacturing purchasing managers’ index (PMI) is expected to come in at 52, above the “50” cut-off level that separates expansion and contraction. The ISM’s manufacturing PMI is expected to show continued contraction.
Acuity (AYI), Cal-Maine Foods (CALM), ConAgra (CAG) and RPM, Inc. (RPM) are scheduled to report their quarterly results on Wednesday.
Crude oil futures recovered slightly early Wednesday following a two-session retreat, and gold futures went past the $3,900 level before pulling back slightly. While the 10-year U.S. Treasury note yield edged up, the dollar fell amid the government shutdown.
Most major Asian markets advanced, shrugging off the geopolitical developments in the U.S., although the Japanese market declined due to the yen’s strength.
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