As the final trading week of September begins, U.S. stock futures are pointing into the red. Investors are carefully watching for signs of prolonged elevated interest rates, which have weighed on Wall Street throughout September.
At 05:05 ET (09:05 GMT), Dow futures contract is down 57 points or 0.2%, S&P 500 futures have slipped by 8 points or 0.2%, and Nasdaq 100 futures are down 34 points or 0.2%.
The Federal Reserve indicated last week that borrowing costs will need to stay higher for an extended period, increasing upward pressure on bond yields and negatively affecting stocks. Stocks are also grappling with rising oil prices and a stronger U.S. dollar.
September has been a challenging month for U.S. equities, with the benchmark S&P 500 down 4.2%, the tech-heavy Nasdaq Composite sliding 5.9%, and the Dow Jones Industrial Average shedding 2.2%.
Crucial Week in U.S. Budget Stand-off Begins
U.S. lawmakers are working to find a resolution to an ongoing budget stand-off ahead of the October 1 deadline when federal government funding is set to run out.
Over the weekend, both Democrats and Republicans in Congress warned that a deal might not be reached. However, House Speaker Kevin McCarthy remains hopeful that a government shutdown can be avoided.
McCarthy has faced opposition from conservative holdouts within the GOP regarding taxing and spending issues, including support for Ukraine. A plan to create a 45-day extension to government funding has also met resistance.
Tentative Deal to End Hollywood Writers’ Strike Reached
The union representing Hollywood writers, major studios, and streaming services announced a tentative deal to end a months-long strike. The three-year agreement includes increased royalties for writers and protections related to the use of artificial intelligence.
Although the details of the accord have not been disclosed, the Writers Guild of America described it as “exceptional” and providing “meaningful gains” for its members. The agreement still requires ratification by the WGA’s membership.
Hollywood executives are optimistic that this breakthrough in negotiations may pave the way for a potential deal with SAG-AFTRA, the actors’ union, whose talks with studios and streaming companies have stalled.
Amazon’s $4 Billion Investment in AI Group Anthropic
Amazon announced plans to invest up to $4 billion in the artificial intelligence group Anthropic as it seeks to strengthen its position in the AI technology race. Amazon will initially invest $1.25 billion in Anthropic for a minority stake.
Anthropic will have access to Amazon’s cloud computing platform to optimize its AI systems, particularly large language models. Anthropic achieved a valuation of nearly $5 billion in its last funding round earlier this year.
This investment underscores Amazon’s growing focus on generative AI offerings and its push into the AI chip market, competing with Nvidia’s popular processors.
Crude Inches Higher After Negative Week
Oil prices rebounded on Monday after a week of losses, with traders refocusing on the potential for tighter supplies for the remainder of the year. The previous week saw oil prices fall due to concerns about the Federal Reserve’s hawkish policy update.
Prices remain near their highest levels since November 2022, driven by forecasts of a significant crude supply deficit in the fourth quarter. This follows Saudi Arabia and Russia’s decision to extend additional supply cuts until the end of 2023.
By 05:07 ET, U.S. crude futures were up 0.4% at $90.38 a barrel, while Brent crude climbed 0.3% to $92.24 per barrel.
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