The stock market was falling Friday after a vote on the $1 trillion infrastructure package at the heart of President Joe Biden’s economic agenda was shelved Thursday night, hours after a government shutdown was narrowly avoided.
Futures for the Dow Jones Industrial Average indicated an open 200 points lower, after the index fell 546 points Thursday to close at 33,843. Futures for the S&P 500 and Nasdaq signaled a similarly weak start.
Markets reacted to the $1 trillion infrastructure bill vote being shelved.
The delay came amid debate among Congressional Democrats over the second part of Biden’s agenda—a hallmark $3.5 trillion budget reconciliation package addressing the U.S. social safety net and climate change initiatives.
“The issue is that some of the more progressive members among the House Democrats don’t want to vote for [the $1 trillion bill] without the larger reconciliation package, which contains much of Biden’s agenda on social programs,” said Jim Reid, a strategist at Deutsche Bank.
“They fear that voting through the infrastructure bill will see moderates scale back the amount of spending on the reconciliation bill, so they’re using their votes on infrastructure as leverage,” Reid added.
Congress also faces the challenge of raising or suspending the U.S. debt ceiling before Oct. 18 to avoid the first federal default in the country’s history.
Delaying the infrastructure bill vote came after a government shutdown was narrowly avoided, with Biden signing a stopgap bill funding the government through Dec. 3 just hours before funding expired.
“If it all looks like a mess, it is, and markets are reacting appropriately as nerves fray,” said Jeffrey Halley, an analyst at broker Oanda.
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