Equity Futures Trading Is Mixed As Traders Consider DC Votes

Equity futures traded mixed on Monday morning as investors closely watched developments in Washington, DC, as lawmakers rushed to try to avoid a government shutdown and come up with a host of new measures .

S&P 500 contracts were little changed to fall slightly, after the blue chip index posted a three-day winning streak late last week. Futures on the Nasdaq fell behind with a 0.5% drop as Treasury yields climbed. The benchmark 10-year yield extended its gains to 1.48%, hitting its highest level since June as optimism about the economic recovery mounted. Dow futures added about 0.2%.

Investors are launching trading this week after a string of volatile trading, with the potential default of China’s leading real estate developer Evergrande and concerns about monetary and fiscal policy at the forefront. At its lowest closing level last week, the S&P 500 was down just over 4% from its September 2 closing high. The index, however, has since recouped most of those gains and was trading around 1.8% below its all-time high closing at the end of Friday’s session.

This week, investors will be watching developments on the fiscal front closely. Lawmakers are rushing to vote in the coming days on legislation to fund the government beyond the end of the fiscal year Thursday and prevent a government shutdown. This will come against the backdrop of ongoing debates over a $ 1 trillion bipartisan infrastructure deal and a $ 3.5 trillion budget reconciliation plan.

And elsewhere, Federal Reserve Chairman Jerome Powell is expected to testify with Treasury Secretary Janet Yellen before the Senate Banking Committee on Tuesday and the House Financial Services Committee on Thursday, on the Fed and Treasury responses to the coronavirus pandemic.

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House Speaker Nancy Pelosi said on Sunday the chamber would vote on Thursday on the bipartisan infrastructure deal, which the Senate passed last month. That would come on the same day lawmakers are expected to reach an agreement to fund the government to avoid a partial shutdown, which would take effect at 12:01 a.m. ET on Friday without congressional action.

The Senate is expected to vote on Monday on a measure that would extend government funding until early December while raising the debt ceiling until the end of next year. This move, however, is expected to be blocked by Republican lawmakers, who have been reluctant to tie the extension of government funding to the increase in the debt ceiling.

“President Pelosi and Senate Schumer have announced that they will move forward with legislation that links an extension of the government’s spending power to a suspension of the debt limit. Our political economist believes that the likelihood of ‘A government shutdown increases the longer Democrats pursue this route, “David Kostin, chief US equities strategist at Goldman Sachs, wrote in a note Monday morning. “However, we find no major consistent response from the S&P 500 to government shutdowns since 1980.”

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7:39 a.m. ET Monday: Stock futures point to mixed open

Here are the main movements on the markets as of Monday morning:

• S&P 500 Futures Contracts (ES = F): -5.5 points (-0.12%), to 4,440.25

• Dow Futures (YM = F): +59 points (+ 0.17%), at 34,733.00

• Nasdaq Futures (NQ = F): -86.75 points (-0.57%) to 15,232.00

• Raw (CL = F): + $ 1.04 (+ 1.41%) to $ 75.02 per barrel

• Gold (CG = F):-$ 3.40 (-0.19%) to $ 1,748.30 per ounce

• 10-year cash flow (^ TNX): +2.4 bps for a yield of 1.485%

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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter