US Futures Slip as Traders Weigh Fed Path After Shutdown Ends – Europe Market Wrap

US equity futures edged lower as investors reassessed the outlook for interest rates following the official end of the longest government shutdown in history. S&P 500 contracts fell 0.2%, pausing after a multi-day rally that added more than 2% to the benchmark index. European equities also pulled back, snapping a two-session streak of record highs. Treasury yields advanced while the dollar softened. Gold extended its winning streak to a fifth day.

After months of strong gains, markets have faced renewed turbulence amid a data blackout and persistent unease over stretched technology valuations. With the government now back online, investors are bracing for volatility as key economic indicators begin to return. The White House said employment and inflation data for October won’t be published, while the Bureau of Labor Statistics is expected to soon outline a schedule for other delayed releases.

Money-market pricing now implies roughly even odds of a Federal Reserve rate cut next month — after a week of shifting expectations as traders balanced signs of a cooling labor market and fragile consumer sentiment against lingering inflation pressures.

Yields climbed across the Treasury curve, while measures of market turbulence pointed to a potential uptick in swings. The ICE BofA MOVE Index, a gauge of expected bond volatility, has risen to a one-month high after recently touching its lowest level in four years, underscoring how the return of economic data could shake markets.

In the UK, growth nearly stalled in the third quarter, weighed down by concern over looming tax increases in the Labour government’s upcoming budget. The pound briefly slipped after the figures before recovering as the US dollar weakened. Gilts declined alongside European sovereign bonds.