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The S&P 500 Futures witnessed a decline of 0.4% to reach 5,912.50 points by 22:10 ET (02:10 GMT). Simultaneously, the Nasdaq 100 Futures dropped 0.5% to 21,263.0 points. The Dow Jones Futures also fell 0.3% to 42,661.0 points. These futures continued to extend their losses after a slight dip in Thursday evening trade.

Government Spending Bill and Its Rejection

Policymakers assembled the bill at the last moment, incorporating Trump's requests for increased government spending and a raised debt ceiling. However, this spending bill faced a setback as it was rejected in a 174 - 235 vote in the House of Representatives. Surprisingly, several Republican senators also openly defied the President-elect.This new bill replaced a bipartisan deal for government spending approval. The reason behind this was Trump and Tesla (NASDAQ:TSLA) CEO Elon Musk's opposition to the old deal.

Government Funding and Potential Shutdown

Government funding is scheduled to expire at midnight on Friday. This impending expiration marks the start of a partial government shutdown that could have a significant impact on various operations, ranging from border security to travel. During the holiday season, when travel trends are on the rise, the disruption is expected to be particularly severe.Trump and Musk had objected to several provisions in the older bill, considering them as wasteful giveaways to the Democrats. The revised version of the bill removed some provisions related to increasing lawmaker pay. But, on Trump's demand, it proposed limits on national debts for two years. This move was aimed at facilitating the passage of his promised tax cuts.

The Uncertainty for Wall Street

A government shutdown adds another layer of uncertainty to Wall Street. The market was already dealing with steep losses from earlier this week after the Federal Reserve cut interest rates but indicated a significantly slower pace of rate cuts in 2025.

Upcoming PCE Price Index Data

This Friday, the focus will also be on the key upcoming PCE price index data for November. This reading is the Fed's preferred inflation gauge and is likely to play a crucial role in shaping the outlook for interest rates. It will provide valuable insights into the inflationary trends and their potential impact on the financial markets.