U.S. markets are having a bad case of the Monday blues, thanks to Washington.
All three major indices opened to a rocky start, as investors brace for a likely government shutdown.
The Dow Jones industrial average was down 0.8 percent in the first hour of trading. The broader Standard & Poor’s 500-stock index was down 0.7 percent, as was the Nasdaq tech index.
Global stocks also fell in response to U.S. political gridlock. Germany’s DAX index was down more than 1 percent, while London’s FTSE 100 index was down 0.8 percent at 10:30 a.m. Eastern.
“I think markets had been assuming there wouldn’t be a shutdown, that it would be too costly for the Republicans,” said Paul Edelstein, director of financial economics at IHS Global Insight. “It looks like they were wrong.”
Lawmakers in Washington are gathered on the Hill to discuss budget measures that would keep the government open, but little is expected to come of those talks. Last week, the Republican-led House passed a bill that would provide government funding but included an amendment to delay President Obama’s health-care law. The Democrat-controlled Senate is expected to reject the change later Monday.
Investors will have to play a wait-and-watch game in the next 12-plus hours.
“It always comes back to what happens in Washington,” said Edelstein.