The Nasdaq edged down 18.75 points (0.1%) to 23,024.63, the S&P 500 fell 18.61 points (0.3%) to 6,735.11 and the Dow slid 243.36 points (0.5%) to 46,358.42.
Investor sentiment appears to be shifting as the U.S. government shutdown enters its ninth day with no resolution in sight. Ongoing gridlock in Congress—particularly over the inclusion of extended Obamacare tax credits in the funding bill has fueled uncertainty, with verbal clashes between parties signaling a prolonged impasse.
While markets initially shrugged off the shutdown, concerns are mounting about the broader economic impact of continued disruptions. Traders are also weighing recent comments from Fed officials, including Michael Barr who emphasized a cautious approach amid economic uncertainty, leaving the door open for either prolonged tightening or a swift pivot if labor market risks rise.
Gold stocks pulled back sharply , with the NYSE Arca Gold Bugs Index plunging by 4.5% as the price of the precious metal gave back ground after soaring to record highs. Housing stocks were significantly weak, as reflected by the 2.5% slump by the Philadelphia Housing Sector Index. Energy stocks too saw considerable weakness amid a steep drop by the price of crude oil, moving notably lower along computer hardware and transportation stocks.
Asia-Pacific stocks moved mostly higher. Japan's Nikkei 225 Index surged by 1.8%, while China's Shanghai Composite Index shot up by 1.3%. The major European markets turned in a mixed performance on the day, the German DAX Index crept up by 0.1%, the French CAC 40 Index dipped by 0.2 and the U.K.'s FTSE 100 Index fell by 0.4%.
In the bond market, treasuries moved to the downside after ending the previous session roughly flat. As a result, the yield on the benchmark ten-year note which moves opposite of its price, rose by 1.9 bps to 4.14%.