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U.S. stocks are wobbling as investors worry about a looming government shutdown

Published 2023-09-28, 09:58 a/m
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Investing.com - U.S. stocks were wobbling heading into the final days of the month and quarter, as a government shutdown looms.

At 9:53 ET (13:53 GMT), the Dow Jones Industrial Average was down 16 points or less than 0.1%, while the S&P 500 was up 0.1% and the NASDAQ Composite was flat.

Indexes head lower for quarter

In a mixed session on Wall Street on Wednesday, the S&P inched marginally higher and the tech-heavy Nasdaq climbed by 0.2%, while the blue chip Dow was the laggard, dipping by 0.2%. With only one trading day left in September and the latest quarter, all of the main indices are on track to post monthly declines, while the S&P in particular is on course for its first three-month loss in a year.

Weighing on sentiment has been a jump in the U.S. 10-year Treasury yield, which touched a level not seen since 2007 in the prior session. Yields typically rise as prices decrease.

While the S&P 500 has still risen by 11% so far this year, much of these gains have been linked to a surge in technology stocks earlier in the year that was fueled by enthusiasm over artificial intelligence. While AI remains a hot topic, a hawkish Federal Reserve policy update last week has driven many traders to predict that borrowing costs will stay elevated for longer than previously anticipated.

Still waiting on spending deal

One of the issues weighing on investors' minds this week is a possible government shutdown if lawmakers in Washington can't come to an agreement on a temporary spending deal to keep things funded past Saturday.

House Speaker Kevin McCarthy has been critical of a bill put forward in the Senate that extends government funding into November, saying he wants provision for border security. The Senate passed its bill as a stopgap measure to keep things moving until lawmakers can hammer out a longer-term spending deal. 

Congress has until midnight on Saturday, or a shutdown could start as soon as Sunday.

Micron expands loss outlook

Shares in Micron (NASDAQ:MU) were down 4.5% after the U.S. chipmaker guided for a loss in its fiscal first quarter that was wider than analysts' expectations.

The Idaho-based company said it now plans to report an adjusted loss per share of $1.07 during the period, steeper than estimates of 95 cents a share, according to data cited by Reuters.

However, Micron's forecast of $4.40 billion in revenue -- plus or minus $200 million -- in its current quarter topped projections of $4.20 billion.

Investors are hoping that soaring AI demand will boost sales of Micron's high-bandwidth memory chips and help the group weather weakness in other end markets.

Oil prices edge lower after surging on crude stockpiles drop

Oil prices inched down on Thursday, but remained near their highest in more than a year after a fall in U.S. crude stocks added to worries over a tightness in global supplies.

Crude prices have jumped more than 30% over the past three months in response to production squeezes by Saudi Arabia and Russia, though the rally hit a bump last week on economic and demand concerns.

But data on Wednesday from the U.S. government showing crude stockpiles falling by more than anticipated reinvigorated the run-up in oil.

(Oliver Gray contributed to this item.)

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