Dow Jones futures dropped overnight, along with S&P 500 and Nasdaq futures, after a Trump-backed bill to prevent a government shutdown failed. The bill’s failure in the House, driven by a split within the GOP and opposition from Democrats, sets the stage for a partial government shutdown beginning Friday night.
Stock Market Shows Weak Rebound
The stock market attempted a recovery at Thursday’s opening but lost momentum, with the major indexes closing narrowly mixed. While the market briefly regained a portion of Wednesday’s sharp losses, the overall rally lacked strength. Treasury yields continued to rise, and Micron Technology (MU) experienced a significant decline.
Mixed Results from Key Stocks
- Nvidia (NVDA) posted gains but pared back as it remains below critical levels.
- Microsoft (MSFT) reversed its intraday gains but now has a potential handle buy point.
- Tesla (TSLA) saw a small decline after Wednesday’s sell-off, though it found short-term support.
- GE Vernova (GEV) made a positive rebound from its 50-day moving average, but many other stocks struggled.
Despite a brief rally, investor sentiment remains cautious. The lackluster bounce on Thursday did little to inspire confidence, and analysts suggest reducing exposure instead of adding new positions.
Stock Highlights
- Nvidia remains on the IBD Leaderboard, but its position is considered hedged.
- Tesla stock is under observation.
- GE Vernova was featured as Thursday’s IBD Stock of the Day.
- Microsoft continues to hold a spot in IBD Long-Term Leaders.
Trump-Backed Bill Fails to Prevent Shutdown
A bill aimed at funding the government, supported by President Trump, failed in the House on Thursday evening. The proposal was met with resistance from a significant number of Republican lawmakers and nearly all Democrats. Earlier in the week, Trump and Tesla CEO Elon Musk had already derailed another attempt at a funding resolution, leading to the impending shutdown. If no new funding measure is passed, a partial government shutdown is set to begin at midnight Friday.
Market Reaction to Government Shutdown News
Following the bill’s failure, Dow Jones futures fell by 0.4%, with Nike (NKE) among the key stocks affected. S&P 500 futures lost 0.55%, and Nasdaq 100 futures dropped by 0.8%. The futures market‘s decline reflects growing concerns over the impending government shutdown.
Treasury Yields and Inflation Data
The yield on the 10-year Treasury note eased slightly to 4.56%. Investors will closely monitor the Federal Reserve’s preferred inflation gauge, the core Personal Consumption Expenditures (PCE) price index, which is set for release at 8:30 a.m. ET. Despite recent economic reports, the Fed is unlikely to reduce interest rates in the immediate future. However, upcoming inflation and economic data will play a crucial role in shaping expectations for future rate cuts.
Note: Futures market activity does not always reflect the direction of actual trading in the regular session.
Corporate Earnings: FedEx and Nike Report Results
FedEx Earnings Beat Expectations
FedEx reported earnings that exceeded analysts’ expectations, though its revenue fell short. The shipping company also announced plans to spin off its FedEx Freight unit into a separate publicly traded company by mid-2026. Following the announcement, FedEx shares rose 1% to 275.88, just below the key 200-day moving average after dipping below it earlier in the week. FedEx stock has a potential buy point at 313.84.
Nike’s Earnings and Weak Guidance
Nike reported better-than-expected earnings and revenue, but the company’s guidance for the future fell short of market expectations. Under new CEO Elliott Hill, Nike is attempting a turnaround, but its stock remains under pressure. NKE shares rose by 0.3% to 77.10, though they continue to struggle below key moving averages after a three-year period of weak performance.
Carnival Earnings to Be Released Friday
Carnival (CCL) is set to release its earnings report early Friday. CCL stock rose 1.45% on Thursday but faced resistance at its 21-day moving average after a 3.5% loss on Wednesday. A pullback to the 50-day moving average could present a potential buying opportunity for investors.
