Stocks Rise Despite D.C. Shutdown:
Markets recorded solid gains last week as investors largely overlooked the government shutdown and downplayed its potential economic impact.
The S&P 500 Index moved up 1.08%, while the Nasdaq Composite Index rose 1.32%. The Dow Jones Industrial Average advanced 1.10%. The MSCI EAFE Index, which tracks developed overseas stock markets, gained 2.53%.1,2
Source: Bloomberg Finance, L.P. (Performance data normalized 9/26/25 = 0)
Shutdown Talk
The S&P and Nasdaq rose out of the gate Monday morning despite the threat of a possible government shutdown hanging over investor sentiment.3
As the midnight deadline approached for Congress to pass a continuing resolution that would temporarily fund the federal government, the prospect of a shutdown dominated market sentiment. The White House discussed permanent layoffs of some federal workers, stoking fears of further slowing an already sluggish labor market.4
Stocks initially fell on news of the shutdown but recovered by midday, driven by growing investor expectations that the shutdown would be short-lived. The S&P closed above 6,700 for the first time.5
Momentum tempered after Treasury Secretary Scott Bessent suggested gross domestic product (GDP) may take a hit due to the shutdown, but all three averages recovered and closed at record highs.6
Stocks were mixed on Friday after the Senate failed to pass dueling funding bills that would have prevented the shutdown from entering its second week.7
Sources: U.S. Department of the Treasury, Board of Governors of the Federal Reserve System, Charles Schwab
Jobs Report Delayed
Investors have looked past—but continue to be jittery about—the government shutdown and its potential impact on an otherwise resilient economy, which is experiencing a hiring slowdown.
One of the first impacts felt from the shutdown was the Bureau of Labor Statistics’ monthly employment report, scheduled for release on Friday, but delayed until the government reopens for business. However, ADP’s monthly report, released on Wednesday, showed that corporate employers shed 32,000 jobs in September, below the forecast of 45,000 new jobs.8
This Week: Key Economic Data
Source: Bloomberg Finance L.P.
This Week: Companies Reporting Earnings
Source: EarningsWhispers
Author
Gary Aiken
Chief Investment Officer
Concord Asset Management
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Footnotes and Sources
1WSJ.com, October 3, 2025
2Investing.com, October 3, 2025
3CNBC.com, September 29, 2025
4CNBC.com, September 30, 2025
5WSJ.com, October 1, 2025
6CNBC.com, October 2, 2025
7CNBC.com, October 3, 2025
8WSJ.com, October 1, 2025
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