US markets opened the new trading week with sharp declines overnight, weighed down by the ongoing budget standoff in Washington.

Amid a lack of economic news, equities remained under pressure from the get go, with the S&P500 shedding 15 points (-0.9%) to settle at 1676 – a four week low for the index.

The other two major US indices didn't fare much better. The Dow slumped 137 points (-0.9%) to 14936 and the Nasdaq let go of 38 points (-1%) to 3770.

Hopes for a speedy resolution to the budget crisis were dashed by weekend comments from Republican leader, John Boehner, who warned his party would not raise the debt ceiling without concessions from Obama.

In the commodities complex, gold rebounded amid growing fears US politicians will fail to reach an agreement to raise the debt ceiling by the middle of next week, potentially triggering a default.

Bullion futures rose 1.2% to US$1325 an ounce.

The same fears weighed on oil, which faced added pressure from a World Bank report that lowered the growth forecast for East Asian countries. Oil shed 0.8% to US$103.03 a barrel.

The yen continued its upward climb versus the greenback, with safe haven flows propelling the Japanese currency to its strongest level since early August, at 96.71.

In economic news, the ANZ Job Ads Survey and NAB Business Confidence Survey are both due for release at 11:30am, AEDT.

Morning Market Update: Budget Blues is a post from: Australian Stock Report Market Pulse Blog