U.S. Stocks May Give Back Ground Amid Government Shutdown Worries

(RTTNews) - The major U.S. index futures are currently pointing to a slightly lower open on Tuesday, with stocks poised to give back ground after moving mostly higher over the two previous sessions.

Traders may look to cash in on the recent strength in the markets amid concerns about the possibility of a government shutdown at the end of the day.

Lawmakers must pass legislation funding the government by a deadline of 12:01 a.m. ET on Wednesday or face a shutdown.

Democrats have demanded that a temporary funding bill include an extension of enhanced Obamacare tax credits, while Republicans argue the issue should be debated after a funding bill is passed.

After a meeting between President Donald Trump and Congressional leaders on Monday, Vice President JD Vance said he thinks "we're headed to a shutdown because the Democrats won't do the right thing."

"Relations between the Democrats and Republicans are frostier than an Alaska morning, so markets are not confident on the prospects of agreeing a deal before midnight tonight," said AJ Bell investment director Russ Mould.

He added, "One of the biggest short-term concerns for markets is the impact this would have on the release of government data - particularly the jobs number due on Friday - without which the Federal Reserve might not feel as confident about cutting interest rates."

Any selling pressure is likely to be somewhat subdued, however, as lawmakers often reach a last-minute agreement to avoid a shutdown.

Stocks moved mostly higher during trading on Monday, adding to the gains posted during last Friday's session. The major averages all moved to the upside on the day, although buying interest was somewhat subdued.

The major averages finished the day in positive territory but off their early highs. The Nasdaq climbed 107.09 points or 0.5 percent to 22,591.15, the S&P 500 rose 17.51 points or 0.3 percent to 6,661.21 and the Dow inched up 68.78 points or 0.2 percent to 46,316.07.

The continued upward move on Wall Street partly reflected strength among tech stocks, with AI darling and market leader Nvidia (NVDA) jumping by 2.1 percent.

Video game maker Electronic Arts (EA) also surged by 4.5 percent after announcing an agreement to be acquired by an investor consortium comprised of PIF, Silver Lake, and Affinity Partners in an all-cash transaction that values EA at approximately $55 billion.

Under the terms of the agreement, EA stockholders will receive $210 per share in cash, representing a 25 percent premium to the stock's unaffected share price of $168.32 at market close on Thursday, September 25th.

However, traders seemed reluctant to make more significant moves amid concerns about a potential U.S. government shutdown ahead of a deadline at the end of the day on Tuesday.

Traders were also looking ahead to the release of the Labor Department's closely watched monthly jobs report on Friday.

The report, which is expected to show employment rose by 50,000 jobs in September, could impact the outlook for interest rates, but the Labor Department has indicated the release of the data could be delayed if the government shuts down.

Computer hardware stocks turned in some of the market's best performances on the day, with the NYSE Arca Computer Hardware Index surging by 4.1 percent

Western Digital (WDC) helped lead the sector higher, with the data storage company soaring by 9.2 percent after Morgan Stanley nearly doubled its price target for the stock.

Significant strength also emerged among brokerage stocks, as reflected by the 1.4 percent gain posted by the NYSE Arca Broker/Dealer Index.

On the other hand, energy stocks moved sharply lower amid a nosedive by the price of crude oil, dragging the NYSE Arca Oil Index and the Philadelphia Oil Service Index down by 2.3 percent and 1.7 percent, respectively.

Commodity, Currency Markets

Crude oil futures are slumping $1.24 to $62.21 a barrel after plunging $2.27 to $63.45 a barrel on Monday. Meanwhile, after surging $46.20 to $3,855.20 an ounce in the previous session, gold futures are slipping $13.30 to $3,841.90 an ounce.

On the currency front, the U.S. dollar is trading at 147.97 yen compared to the 148.58 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is trading at $1.1734 compared to yesterday's $1.1725.

Asia

Asian stocks ended mixed on Tuesday as investors fretted over a possible U.S. government shutdown, which could start at midnight (local time) if Congress fails to reach an agreement.

A shutdown could delay releases of key U.S. economic data, including closely watched employment data for September, construction spending and possibly international trade data for August.

China's Shanghai Composite Index rose 0.5 percent to 3,882.78 as investors waited for further stimulus to boost domestic demand and sought clarity on a trade deal with the U.S.

Earlier in the day, China's official manufacturing PMI came in at 49.8 in September, up from 49.4 and rebounding to a six-month high while the non-manufacturing PMI disappointed by falling back to neutral levels.

A separate, private PMI survey showed both manufacturing and services activity growing much more than expected in September.

Hong Kong's Hang Seng Index recovered from an early slide to closed 0.9 percent higher at 26,855.56.

Japanese markets ended lower after a summary of opinions at the central bank's September policy meeting showed board members debated the feasibility of raising interest rates in the near term.

Half-yearly portfolio adjustments ahead of the LDP leadership election as well as disappointing industrial output and retail sales data also weighed on sentiment.

The Nikkei 225 Index dipped 0.3 percent to 44,932.63, while the broader Topix Index settled 0.2 percent higher at 3,137.60. Tech stocks led losses, with Advantest and SoftBank Group falling 3.3 percent and 1.9 percent, respectively.

Seoul stocks drifted lower, with the Kospi edging down 0.2 percent to 3,424.60. Data showed earlier in the day that South Korean industrial production rose 2.4 percent month-over-month in August 2025, the strongest pace in five months.

Australian markets fell as the Reserve Bank of Australia held rates steady as expected and struck a cautious tone on policy. The benchmark S&P/ASX 200 Index dipped 0.2 percent to 8,848.80, with financials and energy stocks pacing the declines.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index rallied 1.2 percent to 13,292.36, marking its best daily gain since early August despite renewed volatility in global markets.

Europe

European stocks are turning in a mixed performance on Tuesday amid uncertainty around U.S. President Donald Trump's tariffs and U.S. government shutdown fears amid a partisan deadlock in Congress over spending and healthcare.

In economic news, the U.K. economy grew at a slower pace in the second quarter, as increases in services and construction were partially offset by a contraction in production, the Office for National Statistics reported.

Real GDP expanded by an unrevised 0.3 percent in the second quarter following quarterly growth of 0.7 percent in the first quarter.

Ahead of the release of German inflation figures, preliminary data showed inflation rose in four key German states in September.

Meanwhile, the number of people out of work in Germany increased more than expected in September, according to labor office data.

While the French CAC 40 Index is down by 0.3 percent, the U.K.'s FTSE 100 Index is up by 0.1 percent and the German DAX Index is up by 0.2 percent.

Addex Therapeutics has jumped after announcing it has made significant progress in drug development for neurological disorders.

Investment firm 3i Infrastructure has also moved to the upside after reporting first-half returns above expectations.

Meanwhile, Close Brothers has tumbled. The company swung to a full-year loss of £122.4 million and withheld a final dividend for the year, citing ongoing uncertainty around the Financial Conduct Authority's review of motor finance commission arrangements.

Online fashion giant ASOS has also moved sharply lower after warning that its annual revenue would miss market expectations.

Danish jewelry giant Pandora has also slumped following an announcement that CEO Alexander Lacik will retire in March of 2026 after seven years at the helm.

U.S. Economic News

Standard & Poor's is due to release its report on home prices in major metropolitan areas in the month of July at 9 am ET. The annual rate of home price growth is expected to slow to 1.7 percent in July from 2.1 percent in June.

Also at 9 am ET, Boston Federal Reserve President Susan Collins is scheduled to deliver brief remarks and participate in a moderated question-and-answer session before the Council on Foreign Relations C. Peter McColough Series on International Economics.

MNI Indicators is due to release its report on Chicago-area business activity in the month of September a 9:45 am ET. The Chicago business barometer is expected to rise to 43.0 in September from 41.5 in August, but a reading below 50 would still indicate contraction.

At 10 am ET, the Conference Board is scheduled to release its report on consumer confidence in the month of September. The consumer confidence index is expected to slip to 96.0 in September after dipping to 97.4 in August.

The Labor Department is also due to release its report on job openings in the month of August at 10 am ET. Job openings are expected to decrease to 7.100 million in August after falling to 7.181 million in July.

At 1:30 pm ET, Chicago Federal Reserve President Austan Goolsbee is scheduled to participate in s moderated question-and-answer session before the Federal Reserve Bank of Chicago Midwest Agriculture Conference: Midwest Agriculture and Trade Uncertainty.

Dallas Federal Reserve President Lorie Logan is due to participate in a conversation moderated by Dallas Federal Reserve Vice President Pia Orrenius before the Dallas Fed Survey Participants' Appreciation Reception at 7:10 pm ET.