Earlier on Friday, both the Dow Jones Industrial Average and the S&P 500 had seen gains due to data suggesting a potential ease in inflation. By the closing bell, markets had tumbled to end an already tough September on a sour note, fueled by the likelihood of a government shutdown. Despite the dip, broadcast stocks remained about even for the day, to close out the third quarter.
The Dow fell by more than 100 points, or near 0.4%. Market losses were also reflected in the S&P 500, which dropped by 0.3% to close out its worst month of the year. Meanwhile, the Nasdaq Composite managed to eke out a 0.2% gain. The Federal Reserve’s primary inflation gauge, known as the core Personal Consumption Expenditures (PCE) price index, rose by 0.1% in August and 3.9% annually—figures that aligned with economists’ predictions.
This legislative stalemate over the House GOP’s inability to pass a stop-gap raised concerns that a government shutdown could become a reality. The duration of a potential shutdown and its impact on economic data, consumer confidence, and interest rates are now key concerns for investors.
Market losses are expected to be sharp for both the month and quarter, which closed on Friday. The S&P 500 is set to end the month down by 5% and the quarter by 3.8%. The Nasdaq Composite is expected to finish September down by 6% and the quarter by 4.3%. The Dow is predicted to see a monthly decline of 3.7% and a quarterly drop of 2.8%.
