U.S. stock futures held steady Wednesday, signaling resilience on Wall Street even as the federal government entered another shutdown. Traders instead focused on the growing likelihood of further Federal Reserve interest rate cuts before year-end.
- Dow Jones Futures: flat at 05:45 ET (09:45 GMT)
- S&P 500 Futures: up 12 points (+0.2%)
- Nasdaq 100 Futures: up 85 points (+0.4%)
The S&P 500 closed at a record high for the fourth straight session on Tuesday, underscoring investor willingness to look past political dysfunction in Washington. Shutdowns historically exert limited impact on equities, even though they disrupt federal services ranging from disaster relief to air traffic control.
The current standoff follows Congress’s failure to approve fresh funding, with no clear path to resolution. Betting platform Polymarket suggests the shutdown will last one to two weeks, but assigns a 34% chance to a longer standoff, with $1.2 million wagered on outcomes.
The longest shutdown in U.S. history spanned 35 days in 2018–19 and cost the economy an estimated $11 billion, according to the Congressional Budget Office.
Jobs Data Delay Boosts Rate Cut Bets
The shutdown is expected to delay the release of September’s nonfarm payrolls report, leaving markets reliant on private data to gauge labor market conditions.
Recent figures show mounting weakness:
- ADP National Employment Report: steepest private payroll decline in 2.5 years.
- Job Openings Data (August): marginal increase, but hiring slowed.
- Challenger Layoffs Data (Thursday): now expected to attract heightened market attention.
The Federal Reserve, which cut rates by 25 basis points in September, has emphasized support for a cooling jobs market despite persistent inflation above its 2% target. Traders now see a strong chance of additional cuts at the Fed’s two remaining meetings this year.
Pharma Stocks, AI Valuations, Oil Moves
Corporate headlines also shaped Thursday’s session. Pharmaceutical stocks gained traction after Pfizer (NYSE:PFE) struck a deal with the Trump administration to lower Medicaid drug prices in exchange for tariff relief. The White House signaled other drugmakers are expected to follow.
In technology, OpenAI was valued at $500 billion following a $6.6 billion secondary share sale, surpassing SpaceX’s $400 billion valuation and making the ChatGPT creator the world’s most valuable startup.
Energy markets remained under pressure.
- Brent crude: $65.01 per barrel (–0.5%)
- WTI crude: $61.46 per barrel (–0.5%)
Both benchmarks extended losses, with Brent at its lowest since June and WTI at its weakest since late May. Investors weighed OPEC+ supply expectations against heightened geopolitical risks and renewed sanctions pressure on Russian oil.