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1h ago

Markets Turn Cautious as U.S. Shutdown Threat Puts Data and Fed Cuts in Doubt

A funding lapse could stall key economic reports, complicating the Federal Reserve’s data‑dependent path to further rate cuts.

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An employee shows a hundred U.S. dollar bill in an exchange house, in Bogota, Colombia January 27, 2025. REUTERS/Luisa Gonzalez
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Overview

  • U.S. stock futures slipped Tuesday after Monday’s equity gains, with investors focused on the risk of a federal shutdown that could begin Wednesday at the start of fiscal 2026.
  • A shutdown could delay the September jobs report and other releases, and the Labor Department has prepared for a potential postponement of payrolls, according to Reuters.
  • Traders still price a high chance of an October rate cut, but analysts warn a data blackout could delay easing, underscoring the Fed’s data‑dependent stance.
  • Gold hit fresh records around $3,820 to $3,830 an ounce as the dollar eased, while oil fell on resumed Kurdistan‑to‑Turkey flows and expectations OPEC+ will increase output.
  • New U.S. tariffs announced by President Trump take effect Oct. 1 on items including certain pharmaceuticals, heavy trucks, cabinets and furniture, adding another source of uncertainty as the White House met congressional leaders to avert a shutdown.