Stock futures declined and bond yields rose as Republicans and Democrats were able to reach an agreement to avoid a government shutdown. The surprise votes to fund federal operations through mid-November prevented a partial closure that could have had negative effects on workers. However, the rise in benchmark Treasury yields, reaching 16-year highs at over 4.6%, and the strengthening of the dollar against other currencies, pose potential challenges for the market.
The potential government shutdown had threatened to further dampen the U.S. stock market, which had already experienced a lackluster period with the S&P 500 recording its worst monthly performance this year in September, falling almost 5%. These developments created uncertainty and weighed on investor sentiment.
In other parts of the world, Japanese government bond yields reached their highest level in a decade following an optimistic survey of business sentiment published by the central bank. Meanwhile, Europe’s main stock indexes initially rose but ultimately declined, and Bitcoin traded above $28,300, showing signs of a strong performance. Chinese markets were closed for a holiday, further limiting trading activities in the global market. Overall, these various factors suggest a mixed outlook for different markets and highlight the ongoing volatility and complexity of the global economic landscape.