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U.S. stocks opened lower on Monday, with Wall Street on track to start September’s final week of trading in the red, continuing the declines seen this month after the Federal Reserve signaled that interest rates will remain higher for longer.
Traders are also keeping an eye on updates on the potential federal government shutdown. The budgetary standoff doesn’t look like it will abate soon, raising the likelihood of the first government shutdown since 2019, as hardline Republicans continue to hold off on agreeing to a stopgap spending bill.
Minutes after the opening bell, the Nasdaq Composite (COMP.IND) was -0.5%, the S&P 500 (SP500) was -0.3% and the Dow (DJI) was -0.2%.
Treasury yields were higher. The 10-year yield (US10Y) rose 9 basis points to 4.53% and the 2-year yield (US2Y) rose 1 basis point to 5.13%.
See live data on how Treasury yields are doing across the curve at the Seeking Alpha bond page.
“Historically, government shutdowns have not caused a major reaction in the markets,” said Charles Schwab’s Michael Townsend. “But shutdowns can increase market volatility. In the 2018-2019 shutdown, the S&P 500 dropped by 2.7% on the first trading day after the shutdown, rebounded nearly 5% on the next trading day and was up more than 10% by the end of the 35-day shutdown.”
On the economic front, the Chicago Fed National Activity Index unexpectedly slipped in August. The Dallas Fed Manufacturing Survey is expected later in the session.
See the stocks making the biggest moves this morning.