Dow Jones, Nasdaq 100 Edge Lower in Asian Trade as Traders Await Powell Speech

China Equity Markets Open with Fresh 2025 Highs

The World Bank raised China’s 2025 GDP projection to 4.8%, easing fears that US tariffs are hurting the economy. Mainland equity markets reopened with the bullish trend intact amid hopes of a US-China trade deal and fresh stimulus from Beijing. However, market optimism toward Asian indices failed to boost demand for US stock futures in morning trading on Thursday, October 9.

Uncertainty surrounding the Fed’s monetary policy stance and concerns about the US Government shutdown left US stock futures in the red. Renewed US-China trade tensions also weighed on US stock futures as Beijing announced export restrictions on rare earth minerals and equipment.

US Government Shutdown Enters Eighth Day

As trade tensions simmered, Capitol Hill remained in the spotlight. The US Senate fell short of the 60 votes needed to pass a stopgap funding bill on Wednesday, October 8. A prolonged shutdown would likely negatively impact the US economy and raise stagflation risks. According to Kalshi, a betting platform, the US government shutdown could last 24.1 days, which would be the second-longest shutdown.

For context, the 35-day shutdown in 2018-2019 shaved an estimated $11 billion off the US economy.

Passing a stopgap funding bill will be vital, given the ongoing delays in key US economic data releases. The FOMC Meeting Minutes from September highlighted downside risks to the labor market and upside risks to inflation.

A sharp rise in US unemployment could pressure the Fed into a more dovish policy stance if inflation holds steady, lifting demand for US stock futures. Conversely, stronger-than-expected labor market data may allow the Fed to focus on inflation, potentially weighing on sentiment.

How Are US Stock Futures Moving Amid Fed Policy Uncertainties?

US stock futures posted losses in morning trading on Thursday, October 9. The Dow Jones E-mini dropped 57 points, the Nasdaq 100 E-mini fell 7 points, and the S&P 500 E-mini declined 5 points.

Later Thursday, traders should continue to monitor headlines from Capitol Hill. However, a Fed Chair Powell speech will be the main event. Powell’s tone could make or break October sentiment.

Fed Chair Powell’s views on the influence of the US government shutdown on the economy and monetary policy will be crucial. Traders should also consider comments on inflation.

Powell’s support for an October rate cut and further policy easing could boost demand for US stock futures. Conversely, concerns about inflation may extend the morning losses.

Key Technical Levels for Dow Jones, Nasdaq 100, and S&P 500

Despite the morning losses, US stock futures remain above the 50-day and 200-day Exponential Moving Averages (EMAs), reaffirming a short-term bullish bias.

However, the near-term outlook hinges on Fed Chair Powell’s remarks, the US Senate vote, and upcoming economic data. Key levels traders should monitor include:

Dow Jones

• Resistance: 47,000, the October 3 record high of 47,323, 47,500.
• Support: 46,500, 46,000, the 50-day EMA (45,799).

Nasdaq 100

• Resistance: October 9 record high of 25,394, 25,500.
• Support: 25,000, 24,500, the 50-day EMA (24,158).

S&P 500

• Resistance: October 9 record high of 6,812, 7,000.
• Support: 6,600, the 50-day EMA (6,571).

October Market Outlook: Fed Chair Powell and Capitol Hill in Focus

US stock futures could face a choppy Thursday session. Fed Chair Powell may dampen market hopes for October and December rate cuts or lift sentiment.

Meanwhile, a seventh failed Senate vote could impact risk appetite and send US stock futures lower. However, Powell’s support for Fed rate cuts in October and December may ease stagflation fears and overshadow the Senate impasse.

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