Traders work at the New York Stock Exchange on Oct. 1, 2025.
NYSE
On Wednesday, the U.S. government ground to a halt. Stock markets, however, jumped — one benchmark even hit a record high.
Traders in prediction markets are betting the shutdown will last nearly two weeks. Nothing too radical, since that’s the average length it takes for the government to reopen, based on data going back to 1990 from Bank of America.
The government stoppage isn’t putting the brakes on the stock market momentum. Are investors getting too adventurous? Well, history shows the pattern is not new. The S&P 500 has risen an average of 1% the week before and after a shutdown, according to data from BofA.
Even the ADP jobs report, which missed expectations by a wide margin, did little to subdue the animal spirits. Private payrolls declined by 32,000 in September, according to ADP, compared with a 45,000 increase estimated by a Dow Jones survey of economists.
The Bureau of Labor Statistics’ official nonfarm payrolls report is now stuck in bureaucratic purgatory and hence not being released Friday. So, the U.S. Federal Reserve might place additional weight on the ADP report — though it’s not always moved in sync with the BLS numbers. Traders expect weak data would prompt the Fed to cut interest rates in October.
Shrugging off all negative news, the S&P 500 closed above the 6,700 level for the first time. Looks like, once again, the perception of what is bad news is starkly different for outside observers and the markets.
What you need to know today
And finally…
Morning light hits the U.S. Capitol hours ahead of a press conference to discuss the Epstein Files Transparency bill, directing the release of the remaining files related to the investigations into Jeffrey Epstein and Ghislaine Maxwell, on Capitol Hill in Washington, D.C., U.S., September 3, 2025.
Jonathan Ernst | Reuters
How a U.S. government shutdown could impact global markets
The U.S. government entered a shutdown on Wednesday. It adds to concerns over U.S. institutional credibility, fiscal position and “dysfunction,” according to Luke Bartholomew, deputy chief economist at Aberdeen.
Joe Brusuelas, chief economist at RSM U.S., noted that the biggest outcome for markets could be further pressure on the greenback or an impact on the Fed’s October rate decision.
— Chloe Taylor and Tasmin Lockwood