The S&P 500 on Thursday clocked a technical 10% correction from recent highs for the first time since 2023, but it may get some relief at the end of a torrid week from signs that a partial U.S. government shutdown may be averted.
With losses of more than 4% for the week through Thursday's close, the S&P 500 was on course for its worst week in two years, but futures bounced overnight as one of the multiple clouds hanging over the market appeared to pass after the bell.
Top U.S. Senate Democrat Chuck Schumer said he would vote to advance a Republican stopgap funding bill, signaling that his party would provide the votes needed to avert a government shutdown before the midnight deadline on Friday.
But risk of a partial government shutdown was just one of the uncertainties weighing on stocks, which include an escalating global trade war and fears that it may sow a rare downturn in the economy.
With few major economic updates this week and the Federal Reserve's latest policy meeting coming next week, markets will likely focus today on the University of Michigan's latest survey on consumer confidence.
Economic jitters appear to be undermining investment confidence beyond stocks, as high yield bond risk premiums have widened off recent lows without further drops in benchmark Treasury yields.
So called junk spreads on the sub-investment grade corporate bond index expanded to their widest in more than six months to 340 basis points on Thursday, with high-yield volatility gauges hitting their highest since November 2023.
Overseas, stocks indexes caught a break on Friday as Wall Street futures stabilized, despite ongoing losses in some sectors in Europe wary of upcoming U.S. tariffs.
Chinese mainland shares jumped more than 2% on fresh domestic stimulus hopes. China's financial regulators urged institutions to boost support for consumption, promising in a statement on Friday to relax consumer credit quotas and loan terms.
Meanwhile, the dollar ticked higher, and gold surged to a another record high.
