S&P500: Pre-Market Calm as Consumer Sentiment Looms, Shutdown Clouds Outlook

Stock Futures Steady as Traders Await Consumer Sentiment and Bank Earnings

U.S. stock futures were little changed early Friday, following a modest pullback in the S&P 500 and Nasdaq Composite from record highs. Futures on the S&P 500 and Nasdaq 100 edged up 0.1%, while Dow Jones Industrial Average futures added 48 points, or 0.1%.

Indexes Ease After Record Rally

Thursday’s session saw both the S&P 500 and Nasdaq close lower after forming closing price reversal tops—a technical warning that often signals a short-term correction lasting two to three days. While not a shift in the broader uptrend, the move suggests investors may be taking profits after an extended rally. The Dow has also lagged behind the tech-heavy benchmarks, a potential bearish divergence heading into the weekend.

Despite the late-week weakness, both the S&P 500 and Nasdaq are still tracking small weekly gains of 0.3% and 1.1%, respectively. The Dow, however, is pacing for a 0.9% weekly decline, with losses tempered by renewed buying in Nvidia. The chipmaker’s shares are up 2.6% this week after CEO Jensen Huang told CNBC that computing demand has “gone up substantially” this year, reigniting enthusiasm in the AI sector.

Government Shutdown Extends, Data Delays Cloud Fed Outlook

The U.S. government shutdown entered its tenth day Friday, with lawmakers failing for a seventh time to approve temporary funding measures. The ongoing stalemate has halted key economic releases, leaving investors without critical data points such as September’s inflation figures.

According to Vital Knowledge’s Adam Crisafulli, the University of Michigan’s consumer sentiment index—set for release Friday at 14:00 GMT—could take on outsized significance in the absence of government data. He warned that the shutdown “will start to become a more critical part of the economy” if it continues to disrupt inflation reporting ahead of the Federal Reserve’s late-October policy meeting.

Earnings Season and Fed Outlook in Focus

Corporate earnings are set to take center stage next week, with major banks including JPMorgan Chase and Citigroup kicking off third-quarter results. Traders will be watching for signs of credit quality and consumer health as the next potential catalyst for direction.

Meanwhile, Fed Governor Christopher Waller said the central bank still sees room for additional rate cuts but must remain “cautious about it.” His remarks reinforced expectations that policymakers will tread carefully as they weigh softening growth against persistent inflation concerns.

Market Forecast: Short-Term Caution, Longer-Term Optimism

With the rally stretched and economic data limited, traders may see choppy action into early next week. However, improving earnings visibility and expectations for further Fed easing could keep the broader bullish trend intact once the government impasse is resolved.

More Information in our Economic Calendar.