Wall Street Holds Firm Despite Shutdown and Weak Jobs Data

It’s not every day you wake up to headlines of a U.S. government shutdown and still see green on Wall Street screens. But that’s exactly what happened yesterday: despite the first federal shutdown in seven years, markets showed surprising resilience.

Investors clearly decided that politics is noise, what really matters is the Fed, jobs, and company earnings.

Shutdown Drama: Investors Unfazed

At midnight local time, the U.S. government officially shut down after Congress failed to agree on a temporary budget. Roughly 750,000 federal employees are now furloughed.

You’d expect panic, but the Dow Jones still closed +0.1%, the Nasdaq added +0.4%, and the S&P 500 managed to scrape higher.

Why the calm? Simply put, the market is betting that the shutdown won’t last too long. As Mark Hackett, chief strategist at Nationwide, put it: “A prolonged shutdown would be problematic due to missing economic data. Without numbers, traders start trading on headlines, and that’s never healthy.”

For now, though, the mood is: “Wake me up when this really matters.”

Weak Job Numbers Stoke Rate Cut Hopes

The bigger market mover was jobs data. The ADP report showed that the private sector lost 32,000 jobs in September, a shocker compared to expectations of +50,000. Even worse, August’s numbers were revised down from +54,000 to -3,000.

That weakness sent U.S. Treasury yields sliding, with the 10-year dipping to 4.10% (-5bps). The bond market is now pricing in at least two more Fed cuts this year. Translation: bad news for workers is still good news for Wall Street.

Company Highlights

Lithium Americas (LAC | +23,29%)

Talk about fireworks. Lithium Americas soared after the U.S. Department of Energy revealed it had taken a 5% stake in both the company and its Thacker Pass lithium project, a joint venture with General Motors. The project could eventually supply lithium for up to 800,000 EVs annually, helping reduce U.S. reliance on China.

This is a big deal, literally and geopolitically. The U.S. government just put real money on the table to secure critical materials. Expect lithium to stay in the headlines.

AES Corp (AES | +16.79%)

AES, the struggling energy group, suddenly turned into Wall Street’s darling. The Financial Times reported that BlackRock’s Global Infrastructure Partners unit is preparing a $38B takeover bid.

AES stock had been cut in half over three years, but with hyperscalers like Microsoft and Alphabet throwing billions at new datacenters, electricity demand is booming. BlackRock smells opportunity.

Pharma Rally: Pfizer Leads the Pack

The pharmaceutical sector got an unexpected boost from the Trump administration. Plans were announced for TrumpRx, a government-backed website where consumers can buy drugs directly from manufacturers. Analysts called it a potential “blueprint for wider cooperation” with Big Pharma.

The result? A sector-wide surge:

Pfizer (PFE | +6.79%)

Merck (MRK | +7.39%)

Eli Lilly (LLY | +8.18%)

Moderna (MRNA | +6.85%)

• All US Pharmaceuticals
• All US Biotechnology

Who would have thought Donald Trump would trigger a biotech bull run?

Other Movers

Nike (NKE | +6.41%)

• Nike managed to surprise investors with better-than-expected sales. But not all is rosy: the company now expects $1.5B in extra costs from import tariffs this fiscal year. Still, the market focused on the topline strength, and the stock sprinted higher.

Tesla (TSLA | +3.31%) vs Netflix(NFLX | -2.34%)

• Tesla continued its monster rebound, now +40% in a month, not bad for a company that had been declared “dead money” earlier this year.

• Meanwhile, Netflix stumbled after Elon Musk (because who else?) called for a boycott over a controversial show creator. Musk 1 – Netflix 0, at least in stock market terms.

GEO Group (GEO | +5.51%)

• Won a fresh ICE contract for monitoring services.

Final Thoughts

Investors faced a government shutdown, ugly jobs data, and political noise and still decided to buy. That tells me the market is laser-focused on one thing: Fed policy. Weak jobs = easier Fed. And as long as that narrative holds, dips will be bought.

That said, I’ll be keeping a close eye on how long this shutdown drags on. If we stop getting official economic reports, traders will be flying blind and that’s when things can get truly volatile.

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Kristoff - ChartMill

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