Five things to watch in markets in the week ahead

Investing.com - The partial U.S. government shutdown remains the central item on the agenda for the week, especially as the impasse in Washington has led to the delay of several key economic data points prior to an upcoming Federal Reserve monetary policy gathering. Minutes from the Fed’s last meeting in September are due out this week, along with earnings from firms like Constellation Brands and Delta Air Lines.

1. U.S. shutdown in focus

U.S. stock futures climbed on Monday, as investors kept tabs on an ongoing federal shutdown in Washington and awaited both a Federal Reserve interest rate decision and the arrival of third-quarter earnings season later this month.

A partial shutdown of the U.S. government has also led to the delay of official economic data, including the all-important nonfarm payrolls report.

These postponements have led to heightened scrutiny of private-label economic figures over the last few days. Trackers of private employment and business activity, in particular, signaled "darkening storm clouds" and elevated inflation ahead, analysts at Vital Knowledge said in a note.

The absence of official data has also taken on more importance with the Fed set to unveil a fresh interest rate decision in October. Despite the lack of government numbers, markets are still widely anticipating that the central bank will opt to roll out more borrowing cost reductions at its next policy meeting, according to CME’s FedWatch Tool.

All the while, the shutdown drags on, with Republicans and Democrats at odds over healthcare assurances. On Sunday, a top White House official warned that mass layoffs of federal workers will begin if President Donald Trump decides that talks with congressional Democrats to end the shutdown are "absolutely going nowhere."

2. FOMC minutes

Against this muddy backdrop, traders will have the chance to parse through minutes from the Fed’s September gathering on Wednesday.

At the meeting, the central bank slashed rates for the first time since December, with policymakers appearing to be prioritizing bolstering the labor market over indications of stubborn inflation.

Officials also indicated that they expect to roll out further rate drawdowns at the Fed’s two final meetings of the year in October and December, although the scope of these possible cuts beyond 2025 and into next year remains a source of some uncertainty.

"[A] cut is fully priced for this month, and the same is virtually true of December’s meeting," analysts at ING said in a note. "The much bigger debate is what happens in 2026. And the government shutdown -- and the resulting data void -- is unlikely to materially change that."

3. OpenAI DevDay

Markets will also be monitoring announcements out of ChatGPT-maker OpenAI at its developers’ conference this week.

Writing on X over the weekend, CEO Sam Altman teased that the event would feature "some new stuff" from the company to help users "build" with artificial intelligence.

Last week, OpenAI -- which was recently valued at $500 billion -- launched its AI video-generating tool Sora as a standalone app, making it initially available in the United States and Canada. Videos in the app, which has sharply grown in popularity, can be used to facilitate the creation and sharing of AI videos that can be sourced from copyrighted content.

But tensions have begun to rise around Sora, especially in Hollywood, where OpenAI has been in discussions with a range of copyright holders. At least one major studio is reportedly set to opt out of letting their material appear in the app.

4. Constellation Brands to report

On the earnings front, Constellation Brands is due to post its August quarter returns after the closing bell on Monday.

The alcoholic beverage maker missed both sales and income estimates during the prior quarter. Like many of its peers, Constellation has been grappling with the twin blows of Trump’s rising tariffs on aluminum and broader economic uncertainty that has led some shoppers to rein in purchases of beers and wines.

Meanwhile, a sweeping crackdown on immigration was cited as one possible driver a significant slowdown in beer consumption, particularly among Hispanic consumers.

These trends have threatened to compound a demand environment for the industry that was already tepid.

5. Delta Air Lines earnings ahead

Delta Air Lines is also scheduled to report its latest quarterly returns on Thursday, just weeks after the carrier reaffirmed its full-year and current-quarter financial guidance.

In September, Delta also lifted the lower end of its revenue outlook for the third quarter through September, saying it now anticipates a top-line uptick of 2% to 4%, compared to a prior forecast of 0% to 4%.

It was a sign of what has become a much more upbeat outlook for the U.S. travel industry after the turmoil and gloom earlier this year following the announcement of Trump’s aggressive import tariffs.

Many travelers moved to take advantage of deep discounts or deals to set out on summer vacations. Yet industry executives have highlighted confidence that resilience in the travel sector could give airlines room to raise airfares in the final months of 2025.