Down futures slid after reports of potential regulatory tightening in the banking sector. Financials are facing valuation pressures and analysts warn of increased compliance costs dampening earnings forecasts. The quiet trading came as a midnight deadline approached, when the U.S. government could shut down because of Washington’s latest political impasse. That’s because history has shown that past shutdowns have had limited impact on the economy and stock market, and many economists and professional investors expect something similar this time around. From an economic perspective, the shutdown coincides with a precarious moment, as highlighted by Wednesday’s closely watched ADP monthly employment report. The data showed private payrolls unexpectedly fell last month, with the private sector shedding 32,000 jobs, missing forecasts that called for a gain of over 50,000. Down futures edged down amid renewed concerns over corporate debt refinancing. Rising borrowing costs pose challenges for capital-intensive Dow constituents, particularly in transportation and manufacturing.
