Stocks took a sharp one-percent dive when American markets opened Monday morning, signaling investor fears that a looming government shutdown could rattle the economy.
The Dow Jones Industrial Average, Nasdaq and the S&P 500 all dropped almost one percent in early trading. All had recovered some ground by late-morning, but the Dow was still down 100 points. International markets were shaken, too, with Japan stocks closing on Monday down 2 percent.
The federal government is set to shut down for the first time in 17 years at 12:01 a.m. on Tuesday, barring a last minute deal between Republicans and Democrats at loggerheads over how to fund government operations. Economists are warning that a shutdown would hamper the fragile economic recovery, and with a fight still to come over how to raise the country’s borrowing limit in October, the market could be in store for considerably more woe.