Dow Jones & Nasdaq 100 Diverge as Tech Stocks Get Boost in Asian Session
US Government Shutdown Hits Pause on Key US Data
The US government shutdown leads to the suspension of key data releases. This week, jobless claims and the US jobs report will be suspended until government offices reopen.
With the next FOMC interest rate decision due on October 29, labor market and inflation data would be key considerations. While missing data could push the Fed toward a cautious rate cut, some FOMC members may argue for delaying cuts until inflation trends are clearer.
The Kobeissi Letter noted that, on average, the Fed takes a more dovish policy stance during a US government shutdown. For context, the Fed will hold its October monetary policy meeting, irrespective of developments on Capitol Hill.
How Are US Stock Futures Reacting to Key Data and the Shutdown?
US stock futures were mixed on Thursday, October 2. The Nasdaq 100 E-mini gained 36 points, and the S&P 500 E-mini advanced 3 points on expectations of an October Fed rate cut. Meanwhile, the Dow Jones E-mini dropped 12 points.
Later Thursday, developments on Capitol Hill could influence risk sentiment. Lawmakers would need to pass a stopgap bill to fund government services through October and November. An extended shutdown could lead to severe layoffs among federal workers. Vice President Vance reportedly warned of significant layoffs if the shutdown extends beyond a few days.
Key Technical Levels for Dow Jones, Nasdaq 100, and S&P 500
Despite the mixed morning, US stock futures traded above the 50-day and 200-day Exponential Moving Averages (EMAs), reaffirming a short-term bullish bias.
However, the near-term outlook depends on key US data, the government shutdown, and Fed rhetoric. Key levels traders are monitoring include:
Dow Jones
- Resistance: The September 23 record high of 47,055.
- Support: 46,500, 46,000, and then the 50-day EMA (45,552).