Stocks Rise Despite US Shutdown as Weak Jobs Data Bolsters Fed Cut Bets – US Market Wrap

Stocks closed higher on Wednesday, appearing to shrug off the first US government shutdown in nearly seven years. US Treasuries rose after private payrolls data confirmed expectations that the Federal Reserve will cut interest rates later this month.

The S&P 500 and Nasdaq 100 both rose for the fourth consecutive session. On Wednesday, the former was boosted by the health-care sector’s optimism following Pfizer’s agreement with the White House. Tech names such as Tesla and Nvidia also contributed to the index’s 0.3% increase.

The 10-year Treasury yield reached 4.08% before settling around 4.10%. The dollar remained steady. Gold hit a new all-time high.

The government shutdown threatens a blackout of critical economic data that the Fed requires to make rate decisions, forcing economists, traders, and policymakers to rely more on private reports like those received on Wednesday.

The ADP report showed that payrolls at US companies unexpectedly fell in September, which is consistent with other data from the past month indicating that the labour market is slowing. That prompted traders to increase their bets on two more Fed rate cuts this year. The Institute for Supply Management reported that factory activity in the United States fell for the seventh consecutive month in September.

Meanwhile, the JOLTS report on Tuesday indicated that worker demand is slowing, providing traders with another snapshot of the labour market at a time when nonfarm payrolls data from the Bureau of Labour Statistics is expected to be delayed.
Given all of this information, some investors do not believe that the absence of Friday’s report will derail the Fed.