US Futures Retreat as Shutdown Sparks Market Jitters, Gold Nears $3,900 – Europe Market Wrap

US stock futures slipped and gold advanced as the first federal shutdown in nearly seven years took effect, disrupting one of the country’s largest employers and threatening a temporary blackout of economic statistics.

Contracts on the S&P 500 dropped 0.6% as traders trimmed risk following the benchmark’s strongest September in 15 years. Nasdaq 100 futures lost 0.7%, with technology names leading declines in premarket dealings.

Bullion surged toward $3,900 an ounce, extending its record-breaking run. The greenback briefly weakened 0.2% before clawing back losses. Short-dated Treasuries firmed, with the five-year yield slipping one basis point to 3.73%.

The US government closed after lawmakers failed to secure a funding deal before the midnight deadline, as President Donald Trump and Congressional Democrats clashed over health-care spending. With critical economic releases now on hold, investors worry the absence of fresh data will obscure the outlook for monetary policy.

Reports immediately at risk include Thursday’s weekly jobless claims and the Oct. 3 release of September’s payrolls. Wednesday’s private-sector hiring data from ADP may therefore take on outsized importance.

The Congressional Budget Office estimates around 750,000 federal employees will be furloughed, costing roughly $400 million a day in lost wages. Trump’s threat to permanently dismiss some government workers could also push jobless claims higher, compounding stress on an already cooling labor market.

Although the next Federal Reserve meeting is still four weeks away, officials may have to deliberate with a murkier picture, as employment slows and inflation remains above target.

Money markets are currently pricing in a 90% likelihood of a quarter-point reduction this month, with nearly 70% odds of another cut before year-end.