Stock market today: S&P 500 falls as government shutdown, trade jitters persist
Investing.com - There are now 50-50 odds that a prolonged U.S. government shutdown will stretch out through the end of October, according to Wolfe Research.
The shuttering of the federal government has now extended into a third week, with Republican and Democratic lawmakers at an impasse over a key funding bill.
Republicans, led by U.S. President Donald Trump, currently hold majorities in both houses of Congress, although they need at least seven Democratic votes to approve the legislation.
Democrats have been holding out their support to call for an extension to health-insurance subsidies, and have signaled that they will not give in to a pressure campaign from Trump, who has threatened to roll out mass layoffs of federal workers during the shutdown.
On Wednesday, an official at the U.S. Treasury Department said the closure could end up costing the American economy up to $15 billion a week in lost output, Reuters reported.
For financial markets, the shutdown has caused the delay of several key indicators of labor market activity and inflation, which Federal Reserve officials in particular use to calibrate monetary policy.
In a note, the Wolfe Research analysts said both sides are "dug in and fully comfortable with their positions."
"From our conversations, we’d say that Republicans feel more confident in their position than this time last week, even as they start thinking more concretely about [Affordable Care Act] extension options, while Democrats continue feeling no pressure to cave," they wrote.
Polling also currently suggests that voters placing at least as much blame on Republicans as on Democrats, which may lessen the desire for either party to find a solution, the Wolfe analysts said.
"[T]hat doesn’t hasten the end of the shutdown if neither side believes they’re taking the blame for those consequences," they added.