Wall St set to open lower on last day of quarter as shutdown looms

By Niket Nishant and Sukriti Gupta

Wall Street's main indexes were on track for a lower open on Tuesday, the final day of the third quarter, as investors fretted over likely delays in the release of key economic data due to a potential U.S. government shutdown.

Sentiment turned risk averse a day after equities posted gains, underscoring how sensitive investors still are to signs of uncertainty.

While previous shutdowns have had a limited impact on markets, some analysts warned the current episode could be more disruptive given the delicate economic backdrop.

"I don't think it will be disruptive for the market in the long term. However, it does inject more uncertainty in monetary policy and fiscal policy," said Eric Teal, chief investment officer at Comerica Wealth Management.

At 08:31 a.m. ET, Dow E-minis (YMcv1) were down 77 points, or 0.17%, S&P 500 E-minis ES1! were down 9.5 points, or 0.14%, and Nasdaq 100 E-minis NQ1! were down 25.75 points, or 0.1%.

The U.S. Federal Reserve's data-dependent stance has heightened the importance of upcoming releases, with investors hoping for a steady stream of benign readings to keep rate-cut expectations alive and support the equity rally.

With the risk of delayed data casting a shadow over markets, the economic reports due on Tuesday - including the Labor Department's Job Openings and Labor Turnover Survey for August and the Conference Board's consumer confidence index - could be significant and attract heightened scrutiny.

Fed Vice Chair Philip Jefferson said the job market faces potential stress if not supported by the central bank.

Traders will also look to a busy slate of Fed speakers for direction, including Vice Chair Philip Jefferson, the Boston Fed's Susan Collins, the Chicago Fed's Austan Goolsbee and Lorie Logan of the Dallas Fed.

Equities have held up well through the third quarter, with the benchmark S&P 500 SPX, the tech-heavy Nasdaq IXIC and the blue-chip Dow Jones Industrial Average DJI all set to notch gains for the second straight quarter.

The benchmark S&P 500 is on track for its best third-quarter performance since 2020.

Markets will now enter the fourth quarter, historically a favorable stretch for equities due to year-end positioning and holiday spending.

Earnings commentary will be in the spotlight during the period, especially as several companies indicated plans to raise prices, which could have implications for inflation and, by extension, the Fed's policy path.

Nike NKE is scheduled to report earnings after markets close on Tuesday, offering an early look at consumer demand and margin trends. Its shares were flat before the bell.

Chipmaker Wolfspeed WOLF surged 24.2% a day after exiting bankruptcy. Firefly Aerospace FLY dropped 10.4% after a testing mishap destroyed the core booster for its centerpiece Alpha rocket.

EchoStar SATS jumped 6.9% after Bloomberg News reported on Monday that Verizon Communications VZ was in discussions with the telecommunications services company to buy some of its wireless spectrum.