Market Commentary

For the week ending 10/3/2025

 

The federal government shut down last week, but Wall Street kept rolling along and the Dow and the S&P both enjoyed another record-setting close.

Although the Nasdaq dipped on Friday, all three major indices closed up more than 1% on the week.

With Democrats and Republicans locked in a stalemate, mostly concerning healthcare coverage, the federal government shut down just after midnight on Wednesday, Oct. 1.

The shutdown suspended pay for more than 2 million federal workers, with some 750,000 ordered not to work and others, such as troops and air traffic control workers, required to work without pay. President Trump has threatened mass firings in the wake of the shutdown.

With only essential government employees still allowed to go to work, the U.S. Bureau of Labor Statistics could not release its nonfarm payrolls report on Friday.

In the absence of data, investors are likely to focus even more on upcoming speeches by members of the Federal Reserve Board this week. Fed Chair Jerome Powell is scheduled to speak at a banking conference in Washington, D.C., on Thursday, along with several others, including Vice Chair for Supervision Michelle Bowman and Governor Stephen Miran.

Although the federal shutdown historically has had little impact on Wall Street, it will affect the release of data as the Fed weighs another rate cut.

Meanwhile, negotiations between China and the U.S. continue with President Trump and President Xi expected to meet at the end of the month on the sidelines of the Asia-Pacific Economic Cooperation (APEC) conference in South Korea.

On Friday, the September ISM Services Index came in at 50.0, down from August’s 52.0 and below consensus 52.0 and marking the fourth month in a row the employment index remained in contraction.

For the week, the Dow closed up 1.1% to 46,758, the S&P 500 rose 1.1% to 6,716 and the Nasdaq climbed 1.3% to 22,781.

Oil fell -7.4% to $60.88/bbl, gold rose 3% to $3,909/oz and the yield on the 10-year Treasury closed down 7 bps at 4.12%.

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