Dow tumbles 200 points on government shutdown fears, S&P 500 closing out worst month of 2023: Live updates

The Dow Jones Industrial Average retreated on Friday as investors followed the latest news about a potential government shutdown and looked to the end of what has been a tough month.

The blue-chip average lost 231 points, or 0.7%, led down by Travelers Companies and Walmart. The S&P 500 dropped 0.5%, while the Nasdaq Composite shed 0.1%.

The Dow and S&P 500 were higher earlier in the day, as traders cheered data showing inflation may be easing. At session highs, the Dow had climbed more than 225 points, or 0.7%, while the S&P 500 added 0.8%. The Nasdaq Climbed had rallied around 1.4% at its best point in the session.

The latest reading of the personal consumption expenditures price index, which is the Federal Reserve’s preferred inflation metric, came Friday morning. So-called core PCE, which strips out volatile food and energy prices, rose 0.1% in August and 3.9% annually. Economists polled by Dow Jones expected that the core PCE would advance 0.2% on a monthly basis and 3.9% year over year.

But investor concerns about the potential for a government shutdown weighed on the market later in the session. House GOP leaders failed to pass a short-term spending bill on Friday, bolstering fears that federal lawmakers wouldn’t reach an agreement on time.

The Dow and S&P 500 are set to end the week down 1.2% and 0.6%, respectively. The Nasdaq Composite should finish 0.2% lower.

The market is expected to see sharp losses for the trading month and quarter, both of which also conclude with Friday’s close.

The S&P 500 is set to finish the month down 5% and the quarter lower by 3.8%. The Nasdaq Composite is off 6% in September, and down 4.3% for the quarter. Both are on track to post their worst months this year. The Dow is on track for a 3.7% decline this month and a 2.8% fall for the quarter.

“Stocks have declined too much and too fast during this seasonally volatile time of the year driven by a long list of worries,” said Carol Schleif, CIO of the BMO Family Office. “The market only a few months ago was worry free amid the belief that the Fed could engineer a soft landing, and now the market’s worry closet door is wide open as investors raise questions about the economic outlook.”