The hope of approving the interim financing proposal in the United States in the coming days has been dashed, leading to a wider decline in US stocks and bonds.

On September 21, local time, the Republican leaders of the U.S. House of Representatives announced a recess until next Tuesday. This decision leaves them with little time to negotiate with Senate Democrats, thwarting hopes of passing a government funding bill in the next few days and significantly increasing the risk of a U.S. federal funding interruption on October 1.

Currently, McCarthy is trying to gain support within the Republican Party for a temporary measure that would provide government funding for 31 days, in order to prevent a government shutdown on October 1 while also strengthening support for longer-term spending bills. He continues to adjust the relevant bills to meet the demands of conservatives.

Earlier on Thursday, the U.S. defense budget legislation failed to pass a procedural vote. The House of Representatives failed to pass a measure to establish rules for debating a defense appropriations bill, which was originally expected to be submitted to the House for a final vote later that day. The vote on the debate rules is usually seen as a rehearsal to gauge support. Defense appropriations bills typically receive approval by a large margin.

However, the latest failure at the procedural vote on the debate rules sends a clear message to the Republican leaders in the House that their core team members are not yet ready to unite, which is a failure for House Speaker McCarthy. McCarthy needs to unite the divided team within his party to avoid a government shutdown at the end of the month.

Two extreme conservative Republicans obstructed the latest progress. Marjorie Taylor Greene, who was once a reliable ally of McCarthy, and another official, Eli Crane, unexpectedly voted against the defense spending bill on Thursday. Greene stated that she opposed the inclusion of $300 million in aid to Ukraine, a move that surprised McCarthy.

After the vote, McCarthy stated that these two individuals changed their positions after the third attempt to submit the usually well-supported defense bill, so he must figure out how to resolve this issue. "This is not the impression they gave us."

Greene tweeted on X platform (formerly Twitter) that she changed her vote to force the leaders to cancel aid to Ukraine, despite voting in favor two days ago. She also said that McCarthy should not be surprised by her opposing vote. "I have told him everything I have told others. My every conversation has been transparent."

The Democrats mocked the situation and urged McCarthy to reach a bipartisan agreement with them as soon as possible. House Democratic leader Hakeem Jeffries likened the current situation to a "Republican civil war." Former House Speaker Pelosi said she had never seen her own bill, like McCarthy's, being blocked.

Analysis indicates that the failure of the defense bill vote is a bad sign for McCarthy's temporary measure to provide government funding for 31 days. Even if he manages to barely pass this temporary measure, it will die in the Senate because it includes cuts of about 30% to domestic agency spending and also involves immigration law amendments.

Currently, investors are increasingly concerned that a government shutdown under the Biden administration would impact the U.S. GDP in the fourth quarter and undermine confidence in the U.S. government's ability to function, leading to a market downturn on Black Thursday:

• The US stock market saw a significant decline during the trading session, with the S&P 500 index closing down 1.64%, the Nasdaq plummeting 1.82%, and the Nasdaq 100 dropping 1.83%.
• US bond yields surged, with the 10-year Treasury yield rising towards the 4.5% level, reaching a high of 4.4962%, the highest since November 1, 2007. It rose nearly 9 basis points during the day.