Updated 2 min read
US stock futures were mixed as Wall Street’s renewed confidence in the Federal Reserve instituting more rate cuts this year so far overshadowed a US government shutdown with no end in sight.
Futures attached to the Dow Jones Industrial Average (YM=F) slipped 0.1% while contracts attached to the benchmark S&P 500 (ES=F) rose 0.1%. Nasdaq 100 futures (NQ=F) gained 0.2%.
Stocks teetered throughout the day Wednesday but ended in the green, with the Dow Jones Industrial Average (^DJI) and S&P 500 (^GSPC) hitting record highs. Weak ADP jobs data confirmed signals a labor slowdown is afoot, cementing bets that more interest rates will land this year despite sticky inflation.
The jobs numbers so far distracted markets from the government shutdown, which is set to drag on at least until the end of the week. On Wednesday, the Senate again rejected both Republican and Democratic bills to fund the government. The Senate will be out Thursday in observance of Yom Kippur, making Friday the next chance to hold a vote on funding.
In the meantime, Republicans are pressuring Democrats to reopen the government and then negotiate over the expiration of healthcare subsidies at the heart of the shutdown. Democrats, however, want movement on the subsidies as a condition of funding. Reports have emerged that a bipartisan group of lawmakers are having very preliminary discussions over a possible offramp to the shutdown.
With the shutdown set to extend to Friday, the release of the September jobs report is all but certain to be delayed given the Bureau of Labor Statistics was set to completely cease operations in the event of a stoppage. The timing of the delay is in high focus for Wall Street as Fed policymakers have indicated cracks in the labor market will loom large in their next interest rate decision, which is set for the end of this month.
At the same time, the White House has indicated it plans to make good on President Trump’s threat to fire federal workers during a shutdown in the next day or two. The president has also warned that he will to use expanded powers during a stoppage to cut government programs.
LIVE 4 updates
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Interesting AM analyst calls
It’s almost earnings season!
And that means the start of interesting pre-earnings notes from the Street.
A few that caught my attention pre-5am:
Chipotle: Bernstein analyst Danilo Gargiulo leaves an Outperform rating on Chipotle (CMG). But he all but hints the stock could get hit again on third quarter earnings. “With persisting macro pressures and a weakening labor market, we expect Chipotle’s same-store sales to miss 3Q25 expectations. Rather than by ‘Mexican food fatigue’, ‘excessive pricing’ or ‘rising competition’, we continue to believe that the relative demand weakness is driven by consumer confidence declining, greater exposure to more impacted demographics, and partially by the increased promotional environment that is compressing consumers’ willingness to pay $10+ for their lunch. We are also conscious that rising beef prices may impact restaurant level margins given Chipotle’s commitment not to take price near term,” says Gargiulo. My recent Opening Bid Unfiltered podcast with Chipotle CEO Scott Boatwright for my insight into the company at this juncture.
PepsiCo: No rest for the weary at PepsiCo (PEP) as it contends with new activist investor Elliott Management and a largely bearish Wall Street. RBC Capital Markets analyst Nik Modi is keeping a Sector-Perform rating PepsiCo, but similar to Gargiulo on Chipotle sound quite bearish on PepsiCo into earnings. “We are expecting another difficult quarter for PepsiCo headlined by continued sluggish top line results in North America as snacking volumes continue to be a challenge, with muted PBNA [North America beverages] trends and pockets of international softness (Coca-Cola (KO) was talking down international beverage volumes in early September),” Modi said.
Alibaba: Alibaba (BABA) is seeing interest today on the Yahoo Finance platform amid estimate raises from JP Morgan analyst Alex Yao. The stock is up 36% in the past month, and 117% on the year. Explains Yao: “Alibaba’s share price has outperformed the sector average, as measured by KWEB, by 364 percentage points in the past three months, due to better-than-expected cloud revenue growth rate in 2Q25 and management’s confident articulation of its investment strategy in food delivery and quick commerce, in our view. After attending Alibaba’s Apsara conference last week in Hangzhou, we are incrementally more positive on AliCloud for its future revenue generation opportunity with external clients (i.e. cloud revenue) and synergy with domestic ecommerce. We believe the positive development in both cloud and China domestic ecommerce warrants a higher valuation multiple as the narrative of Alibaba shifts towards ‘a tier-one asset in China Internet’ from ‘a domestic ecommerce market share loser.”
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Rick Perry’s REIT Fermi jumps after $683M IPO
Fermi’s (FRMI) shares rose 14% before the bell on Thursday after closing 54% up in their Nasdaq debut on Wednesday. The energy real estate investment trust (REIT), founded by former US Secretary of Energy Rick Perry, raised raised $682.5 million in its US listing.
Reuters reports:
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Global chipmakers add $200 billion in value as AI buzz fuels record rally
Asia chip stocks soared on Thursday as investors rushed to get exposure to AI, the latest sign of a frenetic bull run that is pushing tech stocks to all-time highs.
Bloomberg reports:
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OpenAI closes share sale at record-breaking $500 billion valuation
Bloomberg reports:
