NEW YORK / LONDON (IT BOLTWISE) – The end of the longest government shutdown in US history has not buoyed Wall Street. Despite President Trump’s signing of the spending package that secures government funding until the end of January, markets remain subdued. The Dow Jones Index is losing 0.2 percent in early trading, while the S&P 500 and Nasdaq Composite are also falling. Attention now turns to the country’s economic health and the debate over possible interest rate cuts in December.
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The end of the longest government shutdown in US history did not inspire Wall Street. US President Donald Trump has signed the spending package passed by Congress to end the government shutdown. This package ensures government funding until January 30, but only for selected items throughout the year. After the Dow Jones index hit its all-time high the day before, the end of the government shutdown seems to have already been priced in.
In early trading, the Dow Jones Index lost 0.2 percent to 48,178 points, while the S&P 500 and the Nasdaq Composite fell by 0.6 and 1.0 percent respectively. Markets are now turning their attention to the country’s economic health and the debate over a possible interest rate cut in December. However, this discussion is complicated by the data blackout, as US economic data on inflation and the labor market are unlikely to be published in October.
White House press secretary Karoline Leavitt said the data blackout is making the Federal Reserve’s job more difficult. Still, chief market strategist Carol Schleif of BMO Private Wealth expects interest rates to be cut again in December. Boston Fed President Susan Collins, however, sees high hurdles for further easing of monetary policy. The interest rate futures market is only pricing in a rate cut in December with a probability of 53 percent, compared to 63 percent the day before and 96 percent a month ago.
Little is happening on the bond market; the yield on ten-year US government bonds is rising by 2 basis points to 4.09 percent. The dollar falls on speculation about weak economic data, while the dollar index falls by 0.2 percent. If the data turns out to be positive, contrary to expectations, the greenback could rise on the assumption that the US Federal Reserve will forego a rate cut in December. Investors in the gold market are also speculating on weak data and a possible interest rate cut in December, with the price of the precious metal rising above the $4,200 mark.
Oil prices are moving at a premium as sanctions against Russia currently outweigh concerns about oversupply. The International Energy Agency has slightly increased its forecasts for demand and supply in 2025 and 2026, but still expects oversupply. Among individual stocks, Cisco Systems rose by 5.4 percent after the network equipment provider raised its forecast for the fiscal year. The entertainment group Disney, on the other hand, disappointed with its television and film business, which led to a share price decline of 7.5 percent.
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