US Government Shutdown Begins Triggering Market Declines, Data Release Delays

U.S. stock futures and Asian shares declined as the U.S. government shutdown took effect following the failure to pass a stopgap funding bill, with President Donald Trump and Congressional Democrats unable to reach an agreement. This shutdown, the first in nearly seven years, threatens to furlough up to 750,000 federal workers and delay critical economic data releases, including Friday’s nonfarm payrolls report, thereby increasing market uncertainty ahead of Federal Reserve decisions on interest rates. Despite recent strong market gains driven by optimism around artificial intelligence and technology sectors, investors are concerned about short-term volatility and the impact of the shutdown on economic activity. Additionally, Trump escalated tensions by threatening permanent federal employee dismissals and imposing new tariffs on lumber and furniture, which have contributed to declining consumer confidence and market jitters. The shutdown has also caused declines in major U.S. indexes such as the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite, while gold hit record highs before cooling slightly. Overall, the political impasse and economic uncertainty are weighing on markets and investor sentiment, with an 85% probability of the shutdown continuing into October.