US stock futures rose as investors waited to see if the US government would reach a resolution over the federal budget before the end of the week.
The US government entered its fourth day of a shutdown as lawmakers continued to wrangle over the budget bill and debt ceiling.
The stalemate came as Republicans fought for a delay of President Barack Obama's controversial healthcare bill but the Democrats refused to budge.
More concerning is whether Congress will agree to raise the $16.7tn debt limit by the October 17th deadline to prevent the US government defaulting on its obligations.
The Treasury Department said a default could have a "catastrophic effect" on all aspects of the US economy and could lead to "events of the magnitude of late 2008 or worse".
"Not only might the economic consequences of default be profound, those consequences, including high interest rates, reduced investment, higher debt payments, and slow economic growth, could last for more than a generation," the Treasury said.
Economists do not see an end in sight any time soon but a flicker of light shone through after a spokesman for House Speaker, John Bohner, indicated that he is willing to be more flexible in order for the US to avoid hitting the debt ceiling and defaulting on its debt.
"The markets are becoming a little more nervous about the prospect of a US default. So far, investors have been relatively calm, with indices only grinding lower," said Craig Erlam, Market Analyst at Alpari.
"If investors saw this as a genuine threat, losses would be much greater. What we're seeing now is investors staying on the sideline, as opposed to selling aggressively, although that could be about to change."
International Monetary Fund (IMF) Managing Director Christine Lagarde on Thursday said the US needs to raise its debt ceiling to avoid damage to the global economy.
In a speech on Thursday ahead of the 2013 World Bank-IMF Annual Meetings, Lagarde warned: "The government shutdown is bad enough, but failure to raise the debt ceiling would be far worse, and could very seriously damage not only the US economy, but the entire global economy."
"So it is 'mission-critical' that this be resolved as soon as possible," the IMF chief insisted.
As a result of the government shutdown, US economic reports have been cancelled this week including jobs data on Friday.
On the company front, Facebook jumped in pre-market New York trading after the social network said it would sell advertising on its Instagram photo service.
Union Pacific Corp. slumped after the railroad operator's earnings forecast missed analysts' projections.
Tesla Motors rebounded after falling 10% since October 1st when a fire in one of the electric-vehicle maker's vehicles raised questions about safety.