In New York, stock indexes ended the day with a mixed mood as investors continued to stay calm despite the potential government shutdown and the risks associated with it.
The Dow Jones rose by 239 points, or 0.51%, after earlier climbing more than 530 points. The S&P 500 was nearly unchanged (+0.01%), while the Nasdaq Composite fell 0.28%.
Stocks have risen for several weeks on solid corporate profits, enthusiasm about artificial intelligence, and expectations for Fed rate cuts.
The Dow led the rally, with gains also in lagging sectors; investors booked profits in the tech space. The Dow and the S&P 500 reached record highs.
History shows that government shutdowns typically do not affect the long-term prospects for the economy.
“History essentially shows that government shutdowns are mostly headline events rather than factors that affect financial results.”
Key Drivers and Risks
The current market remains sensitive to a lack of full government data, which complicates assessments of the economy amid growing uncertainty surrounding employment and inflation.
“There is no good time for a shutdown, but this one is particularly ill-timed. The absence of updated labor market data coincides with other signs of weakness in the economy.”
On Friday, the main monthly employment report published by the U.S. Bureau of Labor Statistics was not released due to the shutdown, adding to investors’ uncertainty.
“This increases uncertainty, as we are not receiving the consistent economic signals we have grown accustomed to.”
According to ADP, the private sector in September lost 32,000 jobs, which is pushing traders to expect a rate cut in October and support stocks.
“Short-term drivers for stocks include a gradual decrease in uncertainty in trade policy and anticipated Fed rate cuts.”
Due to data delays, the Fed may be left with a blind spot, which heightens risks if the government shutdown lasts longer than the average duration.
“If the shutdown becomes one of the longest in history, the Fed may not have additional high-level data between rate decisions.”
Analysts also note that the absence of government data could complicate understanding of the state of the labor market and the inflation trajectory over the next 12–15 months.
The stock market continues to seek a balance between current corporate results, the development of artificial intelligence, and potential changes in monetary policy, as the government shutdown remains a source of uncertainty that could affect momentum in the days and weeks ahead.
