U.S. stock futures edged higher Monday as investors monitored an ongoing federal government shutdown that has delayed key economic data ahead of the Federal Reserve’s upcoming interest rate decision. A senior White House official warned that mass layoffs of federal employees could soon begin, as prospects for a deal between Democrats and Republicans to reopen the government remain limited. Meanwhile, Constellation Brands (NYSE:STZ) is set to report its latest quarterly earnings, and Japan’s ruling party selected hardline conservative Sanae Takaichi as its next leader.

Futures Advance

U.S. stock futures rose as traders weighed the impact of the prolonged government shutdown and anticipated the start of the third-quarter earnings season later this month.

By 03:10 ET, Dow futures were up 86 points, or 0.2%, S&P 500 futures gained 20 points, or 0.3%, and Nasdaq 100 futures added 103 points, or 0.4%.

On Friday, the main Wall Street indices were mixed, with the S&P 500 and Dow Jones Industrial Average closing at record highs, while the Nasdaq Composite edged down 0.3%. Applied Materials (NASDAQ:AMAT), which warned of a $600 million hit to its fiscal 2026 revenue, weighed on the tech-heavy Nasdaq.

White House Warns of Federal Layoffs

The partial government shutdown has delayed key economic reports, including the nonfarm payrolls data. Analysts at Vital Knowledge noted that private-sector indicators have shown “darkening storm clouds” and rising inflation pressures.

“The absence of official data has also taken on more importance with the Fed set to unveil a fresh interest rate decision in October,” the analysts added. Last month, the Fed cut rates to support a weakening labor market, risking renewed inflation pressures. Despite missing government data, markets widely expect further rate cuts at the central bank’s next meeting, according to CME’s FedWatch Tool.

A senior White House official cautioned Sunday that mass layoffs could start if President Donald Trump determines that negotiations with congressional Democrats to end the shutdown are “absolutely going nowhere.”

Constellation Brands Earnings

Constellation Brands will release its August-quarter results after Monday’s market close. The company missed sales and profit estimates in the previous quarter, affected by higher tariffs on aluminum under Trump and broader economic uncertainty, which has restrained consumer purchases of beer and wine.

“These trends have threatened to compound a demand environment for the industry that was already tepid,” analysts said, citing immigration policy crackdowns as a potential factor impacting beer consumption among Hispanic consumers.

Japan’s Takaichi Wins LDP Leadership

In Asia, Japanese stocks led gains Monday, with the Nikkei hitting record highs after Sanae Takaichi, a fiscal dove, won the Liberal Democratic Party leadership election over the weekend. Takaichi is set to become Japan’s first female prime minister, with a parliamentary session scheduled for mid-October.

“Takaichi was viewed as the most dovish among the five front-runners for LDP leadership,” analysts noted. She has advocated for increased fiscal spending and tax relief to support Japan’s fragile economy and is expected to discourage the Bank of Japan from further rate hikes.

Oil Rises on Smaller-Than-Expected OPEC+ Output Increase

Oil prices rebounded sharply Monday after last week’s losses, following OPEC+’s announcement of a modest 137,000 bpd production increase for November—matching October’s increment but far below the 500,000 bpd some had expected.

“The decision provided relief to traders who had feared a flood of new barrels would overwhelm fragile demand,” analysts said. OPEC+, which has added over 2.7 million bpd this year, continues to unwind the pandemic-era production cuts gradually.

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