Asian shares trade in a narrow range as traders brace for a possible US government shutdown

Key Points

• Asian shares exhibited little movement as investors prepare for a potential U.S. government shutdown, with Japan's Nikkei 225 declining less than 0.1%.
• China's factory activity data for September showed persistent weakness, impacting trade dynamics as tensions with the U.S. remain high.
• The upcoming U.S. jobs report on Friday could influence Federal Reserve decisions on interest rates, which is crucial for stock market performance.
• Gold prices reached a record high of $3,850 per ounce, driven by expectations of interest rate cuts and concerns about global economic debt.

TOKYO (AP) — Asian shares were little changed in narrow trading Tuesday as investors braced for a possible U.S. government shutdown.

Japan's benchmark Nikkei 225 inched down less than 0.1% in morning trading to 45,023.48.

China reported lackluster data on factory activity for September that reflect persistent weakness in the world's second largest economy as trade tensions with the U.S. weigh on exports.

Hong Kong’s Hang Seng was virtually unchanged, rising less than 0.1% to 26,624.16. The Shanghai Composite index added 0.4% to 3,878.88.

Elsewhere in Asia, Australia's S&P/ASX 200 edged up 0.1% to 8,872.40. South Korea's Kospi gained nearly 0.2% to 3,436.25.

The U.S. federal government is nearing a budget deadline that could result in its shutdown.

Past shutdowns have had minimal impact on markets and the economy. But if the stalemate between Democratic and Republican lawmakers persists, that could delay the collection and release of economic data, such as on jobs and inflation.

This shutdown may also be different because the White House may push for large-scale firings of federal workers.

“It feels as though the market has already flogged the government shutdown story from every conceivable angle, the way traders circle a fading theme until there’s nothing left but dust. Yet with the clock ticking down to less than 24 hours before the doors are slated to close in Washington, the narrative refuses to die,” said Stephen Innes. managing partner at SPI Asset Management.

On Monday, Wall Street finished higher as technology stocks recovered some of their losses from late last week.

The S&P 500 added 0.3% to 6,661.21 and the Dow Jones Industrial Average edged 0.1% higher, to 46,316.07. The Nasdaq composite climbed 0.5% to 22,591.15.

Big Tech stocks ticked higher. Amazon added 1.1% following its 5.1% drop last week, and Microsoft rose 0.6% to recover some of its 1.2% decline. They were two of the strongest forces lifting the S&P 500 because they’re two of Wall Street’s most valuable stocks.

A report is due Friday about how many jobs U.S. employers created and cut last month. The hope is that it will be balanced enough to keep the Federal Reserve on track to continue cutting interest rates.

The Fed just delivered its first cut of the year, and officials have penciled in more through the end of next year. That’s critical for investors because U.S. stocks have shot to records from a low in April in large part because of expectations for several cuts from the Fed. Easier rates can give the job market a boost and make investors more willing to pay high prices for stocks and other investments.

If Friday’s job numbers prove too strong, they could make the Fed less willing to cut rates. That could hurt stocks, which already face criticism that they’ve become too expensive following their big rally. If the job numbers are too weak, they could mean a recession that would hurt stock prices on its own.

Electronic Arts climbed 4.5% after the video game maker confirmed rumors of a $55 billion buyout. A group of investors will pay $210 in cash for each share of EA, and they are calling it history’s largest all-cash deal to take a business private.

Gold topped $3,850 per ounce to continue its record-breaking run amid expectations for cuts to interest rates by the Fed, along with worries about inflation and the mountains of debt that governments are carrying worldwide.

In other dealings early Tuesday, benchmark U.S. crude fell 45 cents to $63.00 a barrel. Brent crude, the international standard, lost 51 cents to $66.58 a barrel.

The U.S. dollar fell to 148.54 Japanese yen from 148.60 yen. The euro cost $1.1725, down from $1.1727.

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AP Business Writer Stan Choe contributed.