Congress failed to pass funding legislation for the current fiscal year, causing the federal government to shut down. Stocks opened lower as a result, but all three main U.S. equity indexes turned positive before midday and trended higher through the afternoon.
Sector leaders included an odd mix of technology and consumer discretionary stocks, plus utilities and health care stocks, while a leading athleisure name appears to be on a solid recovery run.
“As expected,” writes Louis Navellier of Navellier & Associates, “the government shutdown started at midnight. The market appears unconcerned.”
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As Navellier recounts, “The history of shutdowns is not scary.” Indeed, they last a little more than a week, on average, and 86% of the time, stocks are higher a year later, with an average gain of 13%.
Any macro downside, Navellier explains, “is likely to push the Fed off the fence for a series of rate cuts. It will also do little to change the AI narrative, the key driver of new market highs.”
Nvidia (NVDA, +0.4%) also hit a new record high on an intraday basis, as semiconductor stocks posted solid gains. “The hopeful dip buyers are going to have to wait,” Navellier concludes. “Momentum remains positive.”
The U.S. Dollar Index (DXY) was modestly lower at 97.71 vs 97.78 on Tuesday. Gold continued to extend its own uncertainty-supported rise to record highs, adding 0.6% to $3,897 per ounce.
At Wednesday’s closing bell, the broad-based S&P 500 was up 0.3% at 6,711, the tech-heavy Nasdaq Composite had added 0.4% to 22,755 and the blue chip Dow Jones Industrial Average was higher by 0.1% at 46,441.
The employment data situation
As of Wednesday’s closing bell, the release of the next jobs report from the Bureau of Labor Statistics and other sets of incoming economic data are on hold until the government shutdown ends.
We do have incoming data from private sources to evaluate, including this morning’s ADP National Employment Report. According to ADP, private U.S. payrolls shed 32,000 jobs in September.
Wall Street expected employers to have added 50,000 jobs last month. ADP also said employers shed 3,000 jobs in August vs an initial count of 54,000 new jobs added.
ADP’s annual recalibration in September – based on the full-year 2024 results of the Quarterly Census of Employment and Wages – resulted in a reduction of 43,000 jobs in September compared to pre-benchmarked data.
“The trend was unchanged,” ADP added. “Job creation continued to lose momentum across most sectors.”
Nike just grew it
Analysts expected revenue to decline by 5% to $11 billion. Earnings of 49 cents per share were down 30% but beat a consensus forecast for a 63% drop to 26 cents.
“While we’re getting wins under our belt,” said Nike CEO Elliott Hill, citing progress in its Win Now initiative and its “priority areas” of North America, Wholesale and Running, “we still have work ahead to get all sports, geographies, and channels on a similar path as we manage a dynamic operating environment.”
Stifel analyst Peter McGoldrick reaffirmed his Hold rating on NKE stock but raised his price target from $64 to $68, citing recent upside vs estimates as well as a return to revenue growth as “strong signs of validation of the turnaround.”
McGoldrick notes management’s outlook “contemplates a ‘non-linear’ pathway forward,” but the analyst sees “steady building into FY27, helped by World Cup 2026.”
It’s still the “most important athletic brand,” according to McGoldrick, who acknowledges a cautious view but still sees an eventual “return to healthy growth” for Nike.
Amgen (AMGN, +5.8%) and Merck (MRK, +7.4%) joined Nike atop the Dow after beleaguered Pfizer (PFE, +6.9%), now partially owned by the federal government, reached a deal with the White House on drug pricing that will benefit pharmaceutical makers generally.
PFE stock rose further on late-day reports of another deal, this one to add Advanced Micro Devices (AMD, +1.4%) as a customer.
AES gets more expensive
Neither AES nor GIP commented on the FT story about advanced talks that could still fall short of a deal.
AES has signed power purchase agreements to provide clean energy for hyperscalers building the infrastructure to support the AI revolution, including Google parent Alphabet (GOOGL, +0.7%), Facebook and Instagram parent Meta Platforms (META, -2.3%) and Microsoft (MSFT, +0.3%).
