Stock market today: US markets poised to open lower as potential government shutdown looms

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.

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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.

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“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.

In Europe at midday, Britain’s FTSE 100 lost 0.9%, the CAC 40 in Paris fell 1.2% and Germany’s DAX was 1.5% lower.

Tokyo’s Nikkei 225 index dropped 0.3% to 38,701.90 after the release of November inflation data on Friday. Japan’s core inflation rate, which excludes fresh food prices, rose 2.7% year-on-year, surpassing expectations.

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The data followed the Bank of Japan’s decision on Thursday to keep its benchmark rate at 0.25%, which pushed the dollar higher against the Japanese yen.

The dollar was trading at 156.70 yen on Friday, down from 157.43 yen but still higher than the average of 150 yen earlier this month.

The Hang Seng in Hong Kong added 0.2% to 19,720.70 while the Shanghai Composite index edged 0.1% lower to 3,368.07 after China’s central bank kept its loan prime rates unchanged on Friday. The one-year lending rate, which affects corporate and most household loans, remained at 3.1%, while the five-year rate, used as a benchmark for mortgage rates, stayed at 3.6%.

Australia’s S&P/ASX 200 dipped 1.2% to 8,067.00. South Korea’s Kospi lost 1.3% to 2,404.15.

In other dealings, U.S. benchmark crude oil gave up 45 cents to $68.93 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, fell 41 cents to $72.47 per barrel.

The euro rose to $1.0401 from $1.0367.