Global markets opened the new trading week with more losses overnight as the US government hurtled towards a historic shutdown.

The declines on Wall Street came amid fears Congress will be unable to reach a deal on the budget by midnight tonight, precipitating the first government shutdown in 17 years.

The budget uncertainty overshadowed a bigger than expected rise in Chicago area manufacturing activity last month, with investors fearful a shutdown will hamper an already wobbly US economy.

The Dow Jones slumped 128 points (-0.8%) to 15130, the Nasdaq fell 11 points (-0.3%) and the S&P500 shed 10 points (-0.6%) to 1682.

There was mostly red in commodity markets, with crude settling near its lowest levels in almost three months amid fears a US government shutdown will lead to weaker energy demand.

Front month crude oil futures declined 0.5% to US$102.33 a barrel.

The US dollar fell slightly versus its major counterparts, with traders reassessing the likelihood of an October start date for stimulus tapering in light of a shutdown.

In economic news, retail sales data is due for release at 11:30am, AEST. That will be followed by the RBA interest rate decision, scheduled for 2:30pm, AEST.

Morning Market Update: Wobbly Wall Street is a post from: Australian Stock Report Market Pulse Blog