U.S. stocks fall after record shutdown ends. What worries investors?

Updated: after the publication of this text, the main US indices accelerated their decline. Thus, the Nasdaq Composite was losing 2.6% at its low for the day, while the S&P 500 was falling by 1.7%. The Dow Jones blue-chip index was falling by 1.4%, although at the beginning of the trading session it updated its all-time record.

U.S. stocks were getting cheaper during trading on November 13. The leader of the fall was the technology index Nasdaq Composite - it fell by 1.8%. The broad market index S&P 500 was losing 1.1%, industrial index Dow Jones - 0.8%. The yield on 10-year Treasury bonds rose four basis points to 4.11%.

Investors are selling off stocks and bonds after the end of the 43-day government shutdown, the longest in U.S. history. The end of the shutdown means investors will once again be able to access economic data whose release has been delayed. But federal agencies may need days, or even weeks, to fully restart work and deal with the backlog of tasks, Bloomberg writes. Against this background, traders no longer estimate as almost 100 percent probability of a Fed rate cut in December, the agency notes.

"The government should be back in session soon, and while that will be a relief to markets and the economy, there are still plenty of uncertainties, especially with the missed inflation and employment data," said BMO Private Wealth chief market strategist Carol Schleif. The lack of economic data has made it harder for the Fed, which is due to make a rate decision in December, she said. Schleif herself expects that the central bank will still cut the rate for the third time in a row.

Sustained high inflation and continued weakness in the labor market are causing more disagreement among Fed governors about what to do with the rate, Bloomberg notes. After the previous meeting, at which the rate was reduced, Fed Chairman Jerome Powell warned that a similar decision in December is not "a foregone conclusion."

This article was AI-translated and verified by a human editor