Craigs Investment Partners broker Peter McIntyre said United States stocks declined, with the S&P 500 index closing at a four-week low, as the stalemate persisted on preventing a US Government default.
''The US Government shutdown has entered its second week with little hope for a near-term resolution,'' Mr McIntyre said.
President Barack Obama has offered to consider bargaining fiscal terms, after politicians raise the debt ceiling next week, while Republican John Boehner, who is Speaker of the United States House of Representatives, has said a debt hike cannot be approved without including fiscal measures.
Forsyth Barr broker Andrew Rooney had a ''high degree of confidence'' that the debt ceiling crisis, as with previous crises, would not result in the US defaulting on its debts.
''Even in a worst-case scenario where the Government remains closed until the October 17 debt ceiling deadline, we'd expect the president to ensure debts are paid, even if this requires emergency powers and a later case in the Supreme Court,'' Mr Rooney said.
CMC Markets Stockbroking business development manager Tracey Warren said the showdown had dominated markets lately, with all talk of the United States Federal Reserve's tapering being on the back burner for now.
''Investors are becoming increasingly anxious as they anticipate an 11th-hour showdown when the debt ceiling deadline rolls around next week,'' she said.
Mr Rooney said the length of the Government shutdown would be ''crucial'' for the economic and stock market impacts.
A longer shutdown increases economic uncertainty, both due to the direct impact of lower Government spending, and through the indirect impact on consumer and business confidence.
Most critically, a long-term shutdown would also raise investor concerns over the possibility of a technical default if the US breaches its debt ceiling.
Mr McIntyre said there were at present two schools of thought: that a compromise would be reached in time, and that while the debt ceiling limit was formally set for next Thursday, there was a further two-week period to reach settlement.
Markets had also considered that while the US Federal Reserve was considering tapering off its monthly $US85 billion ($NZ102.3 billion) of funding for financial stimulus, the impasse was likely to see the tapering scenario pushed out further.
Mr McIntyre said the longer the US impasse went on, the more likely the Reserve Bank of New Zealand would keep the interest-driving official cash rate at its record 2.5% low, and possibly hold for longer against forecasts of upward movement early next year.
He said Wall Street's drop reflected a ''moderate reaction'', with benchmark indexes down about 1%, while European stock markets pared back the worst of their losses during trading, but still ended lower.
On the New York Mercantile Exchange, for every share rising, nearly four declined. Following an almost 152-point drop, the Dow Jones Industrial Average shed 136.34 points to 14,936.24, while the S&P 500 index fell 14.38 points. The Nasdaq Composite shed 1%, to 3770.38.
