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Not Bluffing. The government shutdown deadline came and went, and Wall Street responded by pushing the major indexes to some of their highest levels on record. |
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The S&P 500 rose 0.3% to hit its 29th record close of the year. The Dow Jones Industrial Average rose 43 points, or 0.1%, to build on yesterday’s closing high. The Nasdaq Composite hit its second-highest close in history with a 0.4% gain. |
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Stocks were actually down in premarket trading, which led some on Wall Street to wonder whether traders were finally expressing some doubt about the impact of a prolonged shutdown. |
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Bespoke Investment Group co-founder Paul Hickey wasn’t among them: “The prospect of a shutdown has been well known for weeks now, and betting markets were pricing in a near certainty of one yesterday, so if markets really were concerned and there was even a bit of truth to the Efficient Market Hypothesis, the S&P 500 wouldn’t have traded up 0.4% yesterday,” Hickey wrote. |
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Instead, he pointed to other factors like the fact that investors often rebalance their holdings around the start of a new quarter. |
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Stocks initially traded lower after ADP said the U.S. economy lost 32,000 private sector jobs in September. Economists polled by FactSet were anticipating an uptick of 50,000 jobs during the month. |
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As my colleague Megan Leonhardt discussed in this newsletter last night, private data could take on increasing importance with government data releases halted by the shutdown. |
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August’s figure was also revised to show a decline of 3,000 jobs compared with the prior tally of an uptick of 54,000 jobs. Megan writes that ADP conducted an annual preliminary benchmarking of its payroll data based on full-year 2024 figures on the distribution of employment across industries in the Quarterly Census of Employment and Wages. |
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That doesn’t mean it’s time to panic. Megan explains: |
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The big picture is that Wednesday’s gloomy labor data is “far from definitive,” writes Oliver Allen, senior U.S. economist at Pantheon Macroeconomics. |
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“The September ADP report probably will receive more attention than usual, given that the government shutdown looks set to delay the publication of the official employment report,” he said. “But we still think that the ADP provides very little information of value.” |
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He said that by his estimate, ADP has been a far from perfect predictor of how the monthly government employment data would turn out. ADP has issued revisions as large as 348,000 since the report’s methodology was overhauled in August 2022, Allen wrote. |
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Megan also points to other employment indicators that haven’t pointed to a major labor contraction, including recent figures on jobless claims. |
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Still, odds of an October rate cut jumped to 100% from 96.2% prior to the report, according to the CME FedWatch Tool. Through the end of the year, odds of at least a half-point in cuts are at 87.6%. |
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You can read the full story on ADP here. |
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| - | Last | Chg% |
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↑ Dow Jones Industrial Average | +46,441.10 | +0.09% | ↑ S&P 500 Index | +6,711.20 | +0.34% | ↑ NASDAQ Composite Index | +22,755.16 | +0.42% |
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10/1/2025, 8:00:31 PM ET |
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The Hot Stock: AES +16.8%
The Biggest Loser: Corteva -9.1% |
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Best Sector: Healthcare +3.1%
Worst Sector: Communication Services -1.4% |
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