Market Caution Prevails Amid Economic Indicators and Government Shutdown Fears

U.S. stock index futures showed minimal movement on Thursday, signaling a pause after this week's record rally. Investors are keenly awaiting new developments to sustain market momentum in what has been an unexpectedly robust September.

The market's cautious stance precedes Friday's release of the Personal Consumption Expenditures index, the Federal Reserve's favored gauge for inflation. This could influence future interest rates, especially after Fed Chair Jerome Powell's comments about asset valuations being on the high side, emphasizing the importance of both economic data and corporate earnings aligning with current market values.

Investors are scrutinizing whether the optimism, which propelled markets to new heights post-tariff selloff in April, is underpinned by solid fundamentals. "A bearish sentiment might prevail ahead of the PCE release, as markets demand proof of cooling inflation, with risks tilting negatively if the data surpass expectations," commented Daniela Hathorn of Capital.com.

(With inputs from agencies.)