Stock futures fell Tuesday as a potential U.S. government shutdown loomed. Despite the latest declines, Wall Street was headed for an unusually strong September. Futures tied to the Dow Jones Industrial Average fell 127 points, or 0.3%. S&P futures slipped 0.2% along with Nasdaq-100 futures. Although shutdowns aren’t usually market-moving events, this time could be different as investors are already wary about a slowing labor market, the risk of stagflation and elevated stock valuations. A shutdown could also prompt rating agencies to rethink the condition of U.S. credit, which was downgraded in May by Moody’s. After a meeting between President Donald Trump and top Democrats and Republicans, Vice President JD Vance said Monday evening: “I think we’re headed to a shutdown because the Democrats won’t do the right thing.” The Labor Department also announced Monday that the September nonfarm payrolls report scheduled to release Friday will not come out if the U.S. government suspends operations. The report is one of several upcoming key data releases that will provide crucial information about the direction of the economy ahead of the Federal Reserve’s upcoming October policy meeting. Exacerbating concerns over the shutdown was President Donald Trump’s threat over the weekend that a shutdown could result in mass firings of federal workers. Jack Janasiewicz, lead portfolio strategist and portfolio manager at Natixis Investment Managers, said that a government shutdown could lead to some “tangential effects” in near-term market sentiment and volatility. “With investors keenly aware of the risks to a softening labor market and simultaneously laser focused on the signs of tariff pass-through to inflation, any delay in the collection of economic data resulting from the shutdown could lead to increased uncertainty. And with that increased uncertainty we often see a pick-up in financial market volatility,” Janasiewicz said.“Could such uncertainty be large enough to dent the economic backdrop and along with it risk assets? Probably not a lasting impact but the longer the uncertainty drags out, the greater the risk,” he said. Major U.S. stock indexes continue to hover near record highs ahead of the final September session. The S&P 500, which has averaged a 4.2% drop for the month over the last five years, has increased more than 3% this month. The Dow Jones Industrial Average has gained 1.7%. The tech-heavy Nasdaq Composite has outperformed the other two benchmark indexes with a roughly 5.3% gain in September. Tuesday will also bring the end of the third quarter. The broad-based index is up 7.4% quarter to date, while the Nasdaq is set to notch a nearly 11% quarterly gain. The Dow is up 1.7% over the three-month period, which would mark its fifth positive quarter in a row. U.S. Treasury yields are little changed as investors assess the growing risk of a potential federal government shutdown, while also looking ahead to the Job Openings and Labor Turnover Survey (JOLTs) report. The 10-year Treasury yield was flat at 4.141%, while the 2-year Treasury yield fell less than 2 basis points to 3.619%. The 30-year Treasury yield rose by less than 2 basis points to 4.716%. Asia-Pacific markets traded mixed Tuesday as China’s official reading showed manufacturing activity contracted for a sixth straight month, albeit less than market estimates. Mainland China’s CSI 300 added 0.45% to close at 4,640.69. Australia’s central bank expectedly held benchmark policy rates at 3.6% Tuesday as inflation in the country stays at its highest level in more than a year. Australia’s S&P/ASX 200 lost 0.16% to 8,848.8. Japan’s Nikkei 225 fell 0.25% to 44,932.63, while the Topix added 0.19% to 3,137.6. South Korea’s Kospi lost 0.19% to end the trading day at 3,424.60 while the Kosdaq fell 0.56% to 841.99. Hong Kong’s Hang Seng index rose 0.95%, while the Hang Seng Tech Index added 2.38%. Oil prices fell on Tuesday ahead of another anticipated production increase by OPEC+ and as the resumption of oil exports from Iraq’s Kurdistan region via Turkey reinforced market expectations of a supply surplus. Brent crude futures for November delivery, expiring on Tuesday, fell 84 cents, or 1.2%, to $67.13 a barrel by 0809 GMT. U.S. West Texas Intermediate crude was trading at $62.68 a barrel, down 77 cents, or 1.2%. The drops extend Monday’s falls when both Brent and WTI settled more than 3% lower after their sharpest daily declines since August 1. Gold fell on Tuesday as investors booked profits after prices hit a record high earlier in the session, while concerns of a U.S. government shutdown and increased bets of a Federal Reserve rate cut limited losses. Spot gold fell 0.9% to $3,800.34 per ounce after rising 1% to hit a record high of $3,871.45. Bullion has risen 10.4% so far in September, and is on track for its biggest monthly percentage gain since July 2020. U.S. gold futures for December delivery fell 0.7% to $3,827.80. Swissquote external analyst Carlo Alberto De Casa said gold has pared gains on profit-taking after rising as much as 1% during Asia hours and “so far this is just a technical correction and we are not talking about an inversion.”