Wall Street is poised to open lower ahead of a possible U.S. government shutdown and as the realization sets in that interest rates may remain elevated for a long time.

Futures for the Dow Jones industrials fell 0.4% before the opening bell Tuesday and S&P 500 are off 0.5%.

With the jobs market still hot markets still boisterous, the Federal Reserve will likely keep interest rates high well into next year. The Fed is trying to ensure high inflation gets back down to its target, and it said last week it will likely cut interest rates in 2024 by less than earlier expected. Its main interest rate is at its highest level since 2001.

The growing understanding that rates will stay higher for longer has pushed yields in the bond market up to their highest levels in more than a decade. That in turn makes investors less willing to pay high prices for all kinds of investments, particularly those seen as the most expensive or making their owners wait the longest for big growth.

In the near term, the U.S. government may be set for another shutdown amid more political squabbles on Capitol Hill. But Wall Street has managed its way through previous shutdowns, and “history shows that past ones haven’t had much of an impact on the market,” according to Chris Larkin, managing director of trading and investing at E-Trade from Morgan Stanley.

Japan’s benchmark Nikkei 225 index slipped 1.1% to finish at 32,315.05. Australia’s S&P/ASX 200 dipped 0.5% to 7,038.20. South Korea’s Kospi dropped 1.3% to 2,462.97. Hong Kong’s Hang Seng shed 1.5% to 17,470.31, while the Shanghai Composite fell 0.4% to 3,102.27.

In China, concerns continued over heavily indebted real estate developer Evergrande. The property market crisis there is dragging on China’s economic growth.

“The Chinese property woes are far from over, as the notorious developer Evergrande defaulted on its 4 billion yuan onshore bond repayment and delayed the restructuring meetings,” said Tina Teng, market analyst at CMC Markets APAC & Canada.

While the crisis is not shocking to those closely following China’s property market, concerns are growing that Chia’s housing sector is still deteriorating, raising risks of financial instability, said Stephen Innes, managing partner at SPI Asset Management.

“It’s important to acknowledge that tackling the housing issue is much more challenging in practice than in theory. This difficulty is why property developers are still struggling two years into the Evergrande debt crisis, and potential homebuyers are hesitant to enter the market,” he added.

In Europe at midday, France’s CAC 40 lost 0.7%, Germany’s DAX fell 0.6% and Britain’s FTSE 100 edged up 0.1% .

In energy trading, benchmark U.S. crude slipped 68 cents to $89 a barrel. Brent crude, the international standard, fell 67 cents to $91.21 a barrel.

In currency trading, the U.S. dollar rose to 148.94 Japanese yen from 148.84 yen. The euro held at $1.0594.

Copyright 2023 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.