NEW YORK (AP) — U.S. stocks are tacking more losses onto what was already going to be one of their worst weeks of the year. The S&P 500 fell 0.4% Friday as its struggles continue after the Federal Reserve warned it may deliver fewer cuts to interest rates next year than earlier expected. The Dow Jones Industrial Average dropped 61 points, or 0.1%, and the Nasdaq composite fell 0.9%. Nike helped drag on the market following its latest profit report. But stocks got some relief from an update showing a measure of inflation wasn’t as bad last month as economists expected. Treasury yields eased.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
Wall Street was poised to open with significant losses on Friday as the possibility of government shutdown right before Christmas came closer to reality after the House resoundingly rejected President-elect Donald Trump’s new plan to fund operations and suspend the debt ceiling.
Futures for the S&P 500 slipped 1% before the bell, while futures for the Dow Jones Industrial Average were 0.6% lower.
Lawmakers failed to reach the two-thirds threshold needed for passage before Friday’s midnight deadline, however House Speaker Mike Johnson said he and other Republicans were determined to regroup and come up with another to solution to avoid a shutdown.
It was a massive setback for Trump and his billionaire ally, Elon Musk, who railed against Johnson’s bipartisan compromise, which Republicans and Democrats had reached earlier to prevent a Christmastime government shutdown.
Late Thursday’s impasse could be a preview of the turbulence ahead when Trump returns to the White House with Republican control of the House and Senate. During his first term, Trump led Republicans into the longest government shutdown in history during the 2018 Christmas season.
“Next year will be a time of huge challenges to the world economy,” High Frequency Economics’ Carl B. Weinberg wrote in a note to clients, citing U.S. political uncertainty, expected global trade wars and geopolitical uncertainty. “We do not look forward to these changes.”
In premarket trading Friday, FedEx shares jumped 9% after the package delivery company nudged past second-quarter profit projections and announced it would pursue spinning off its freight division into a separate public company.
Nike fell 4.2% after it gave lowered guidance for the current quarter and U.S. Steel slid 7% after it preannounced negative fourth-quarter results.
Markets are also waiting for U.S. personal spending data for November due later in the day.
