US stock futures edge higher; govt. shutdown in focus

U.S. stock index futures rose slightly on Sunday evening with focus chiefly on bipartisan negotiations to avoid a looming government shutdown later this week.

Futures rose following a positive Friday session on Wall Street, where in-line inflation data helped further bets on at least two more interest rate cuts this year. But the S&P 500 snapped a three-week winning streak on losses in technology stocks.

S&P 500 Futures rose 0.1% to 6,704.0 points, while Nasdaq 100 Futures rose 0.1% to 24,761.25 points by 19:25 ET (23:25 GMT). Dow Jones Futures rose 0.1% to 46,606.0 points.

US govt. shutdown could take place this week; Trump talks eyed
Funding for U.S. government operations is set to expire at midnight on September 30, with Congress having still not agreed to a replacement or extension.

Negotiations are ongoing, with Republicans pushing for at least a stop-gap funding bill till November, while Democrats are demanding that recent cuts to healthcare and Medicaid spending be reversed, as a condition to approve a resolution.

Congressional leaders from both parties are set to meet with President Donald Trump on Monday to discuss legislation. Trump told Reuters that he believed the Democrats wanted to reach an agreement.

A government shutdown this week could delay the release of key labor market data scheduled for Friday. An extended shutdown could also delay future data releases and greatly disrupt economic activity.

The U.S. government had last partially shut down for a period of 35 days in late-2018 to early-2019. The Congressional Budget Office think tank estimated the shutdown had reduced gross domestic product by about $11 billion.

Wall St rises after in-line PCE data, but notches weekly loss
Wall Street indexes rose on Friday after PCE price index data– the Federal Reserve’s preferred inflation gauge- rose as expected in August.

The print indicated that Trump’s trade tariffs did not boost inflation as sharply as some market participants were fearing, and kept investors largely geared towards more interest rate cuts by the Fed in the coming months.

Markets are pricing in a 90.8% chance for a 25 bps cut in October and a 63.8% chance for another 25 bps cut in December, CME Fedwatch showed.

The S&P 500 rose 0.6% to 6,643.70 points, while the NASDAQ Composite rose 0.4% to 22,484.07 points on Friday. The Dow Jones Industrial Average rose 0.7% to 46,247.29 points.

But all three indexes ended lower for the week, having tumbled from recent record highs on losses in technology stocks.