Investors remain sensitive to any signal of policy easing, with rate-cut optimism underpinning much of the recent rally that has taken equities to high valuations.
The data vacuum created by the shutdown has left investors leaning more heavily on alternative sources, such as yesterday’s ADP National Employment Report, which was much weaker than expected.
“It’s likely to fortify those on the Fed policymaking committee who believe that the labour situation merits at least one more cut,” said Arnim Holzer, global macro strategist at Easterly EAB.
With the ADP print potentially the only labour market data available for some time, traders were quick to interpret the weaker reading as enough to tilt the Fed toward a rate cut of 25 basis points at its next meeting.
“It suggests the US economy is in almost dire need of further policy support,” said Kyle Rodda, senior financial market analyst at Capital.com.
At 6.41am, Dow E-minis were down 26 points, or 0.06%, S&P 500 E-minis were up 11.25 points, or 0.17%, and Nasdaq 100 E-minis were up 92 points, or 0.37%.
The benchmark S&P 500 and the blue-chip Dow indexes ended at record closing highs yesterday.
The weekly jobless claims report, a key gauge of labour market health that was due today, will become the first data casualty of the shutdown that began yesterday amid a standoff between Republicans and Democrats.
Historically, government shutdowns have had limited impact on equity markets.
However, with investors closely watching for signs of monetary easing, the current data vacuum poses a greater risk to the Fed’s ability to assess the economy and guide policy.
Later today, investors will also parse commentary from Dallas Fed president Lorie Logan.
Among individual stocks, Tesla was up 1.6% in premarket trading ahead of its quarterly deliveries report, while NYSE-listed shares of Lithium Americas slid 4.6% after Canaccord Genuity downgraded the stock.
Credit bureaus Equifax and TransUnion fell 12.2% and 11.3%, respectively, after FICO launched a programme that could allow mortgage lenders get access to credit scores without relying on the bureaus. FICO was up 10.7%.
Advanced Micro Devices gained 2.9% after a report said Intel was in early talks to add the chipmaker as a foundry customer.