Wall Street futures are slipping as the government shutdown looms before Christmas

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Wall Street futures fell this week as a possible government shutdown looms before Christmas while lawmakers debate a temporary spending bill.

S&P 500 futures fell 1 percent before the opening bell, while Dow Jones Industrial Average futures fell 0.6 percent.

Why it matters

Lawmakers fell short of the two-thirds majority needed to pass the measure before Friday’s midnight deadline. However, House Speaker Mike Johnson stressed that he and his fellow Republicans were committed to regrouping and finding an alternative solution to avoid a government shutdown.

The vote marked a significant setback for President-elect Donald Trump and his billionaire ally Elon Musk, who had criticized Johnson’s bipartisan deal – an agreement between Republicans and Democrats aimed at averting a government shutdown over the holidays.

Thursday night’s deadlock could be a sign of turmoil to come as Trump returns to the White House and Republicans control both the House and Senate. During his first term, Trump experienced the longest government shutdown in U.S. history, which began during the 2018 holiday season.

What you should know

FedEx shares rose 9 percent in premarket trading on Friday after the package delivery giant narrowly beat second-quarter profit expectations and announced plans to spin off its freight division into a separate publicly traded company. Nike shares fell 4.2 percent after the company cut its forecast for the current quarter, while US Steel fell 7 percent after a negative preliminary report of fourth-quarter results.

Investors are also eyeing November U.S. personal spending data, due out today.

By midday in Europe, the British FTSE 100 fell 0.9 percent, the French CAC 40 fell 1.2 percent and the German DAX fell 1.5 percent.

The Nikkei 225 in Tokyo slipped 0.3 percent to close at 38,701.90 on Friday after the release of November inflation data. Japan’s core inflation rate, which excludes fresh food prices, rose 2.7 percent year-on-year, beating analysts’ expectations.

U.S. benchmark crude fell 45 cents to $68.93 a barrel in electronic trading on the New York Mercantile Exchange, while Brent crude, the international benchmark, fell 41 cents to $72.47 a barrel .

What people say

In a note to customers this week: Carl B. Weinberg of High Frequency Economics said: “Next year will be a period of great challenge for the global economy.”

Vineyard Citing political uncertainty in the US and the possibility of trade disputes, he said: “We are not looking forward to these changes.”

What’s next?

On Thursday, 38 Republicans in the House of Representatives voted against a Trump-backed spending bill that would prevent a government shutdown. The bill failed by a vote of 174 to 235.

According to the BBC, government funding is expected to expire at midnight on Friday evening. As a result, lawmakers are expected to meet again Friday morning to try to pass legislation to prevent a government shutdown. This comes after a bipartisan funding deal was also vetoed in Congress on Wednesday.

This article contains reporting from The Associated Press.