President Donald Trump on Tuesday signaled a shutdown was “probably likely” as prediction market traders price an 86% of a U.S. government shutdown before midnight.
According to Polymarket traders, a shutdown by Wednesday looks highly likely, while a shutdown in 2025 is priced at 91%.
The president on Tuesday noted the administration could pursue “irreversible” cuts to Democratic priorities during a funding lapse.
Senate Showdown Pushes U.S. To Brink Of Shutdown
Talks at the White House ended without progress, leaving Democrats and Republicans locked in a funding standoff centered on extending Affordable Care Act subsidies.
The Senate is expected to take a final vote Tuesday on a Republican bill to extend current funding levels for seven weeks.
Senate Minority Leader Chuck Schumer (D-NY) said there were still “very large differences.”
Shutdown Fallout Could Hit Jobs, IPOs And Food Aid
Analysts at Beacon Policy Advisors said the lack of a breakthrough “all but guarantees” a shutdown, which would mark the first in seven years.
A lapse would delay the release of the September jobs report, freeze IPO reviews at the SEC, and potentially halt food stamp payments within 30 days.
The Congressional Budget Office projected that about 750,000 federal employees could be placed on unpaid leave, with compensation losses of $400 million per day.
Past shutdowns have caused travel delays and interruptions in federal services, while extended stoppages have weighed on GDP.
What Stays Open If Washington Shuts Down
Essential services such as the U.S. military, air traffic control, border protection, and in-hospital medical care will continue to operate.
Social Security and Medicare payments remain unaffected, though benefit verification and new card issuance are expected to pause.
The IRS will stay fully staffed for five business days by using carry-over funds, but the contingency plan after that remains uncertain.
S&P 500 Charts Signal Volatility As Deadline Nears
S&P 500 Key Technical Levels (Source: TradingView)
Technical analysis: The S&P 500 index as measured by SPDR S&P 500 (NYSE:SPY) traded flat at the time of writing as investors weighed the risk of a government shutdown.
The daily chart shows the benchmark holding above trendline support near 6,600, with the 20-day EMA at 6,592 acting as the immediate floor.
Bollinger Bands indicate consolidation after a strong rally since May, suggesting the index remains in an uptrend but vulnerable to volatility spikes if funding talks break down.
A sustained move below 6,590 could open room toward the 50-day EMA near 6,468, while resistance is capped at 6,728.
Historically, prolonged political standoffs have pressured equities in the short term, even as markets tend to recover once funding agreements are reached.
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