US Markets Mixed as Government Shutdown Fears Loom
US markets closed Tuesday with mixed movements, despite a second consecutive quarter of gains for equities. Meanwhile, traders fretted over a potential US bank shutdown's impact on the release of crucial nonfarm payrolls data. Oil prices fluctuated as OPEC+ mulled accelerating output increases. Pfizer secured a tariff reprieve by agreeing to cut drug prices and sell directly to US consumers.
The S&P 500 ended the day up 0.4%, following a choppy session that saw it oscillate between small gains and losses. This performance capped off its best September in 15 years, driven by optimism surrounding artificial intelligence and lower interest rates. However, concerns about a US bank shutdown loomed large. Traders worry that such a shutdown could delay the release of Friday's nonfarm payrolls data, which could cloud the Federal Reserve's path of interest-rate cuts. David Quirk, chief economist at Nomura, discussed this scenario and its potential impact on Federal Reserve monetary policy.
In the commodities market, oil prices slipped in a volatile day of trading. OPEC+ nations are considering boosting the pace of future output hikes. The length of a potential US bank shutdown is significant, as stocks typically weaken during longer closures while rates rally.
On the economic front, the JOLTS report revealed that US job openings were largely unchanged in August, while hiring was subdued. This suggests that demand for workers is slowing. Meanwhile, US equities notched a second straight quarter of gains despite tepid stock moves on Tuesday. Treasuries also gained for the third consecutive quarter.
As the month draws to a close, the S&P 500 has enjoyed its strongest September in over a decade, buoyed by AI optimism and lower rates. However, looming concerns about a US bank shutdown and its potential impact on crucial economic data cast a shadow over the market's recent gains. Oil prices slipped as OPEC+ considers accelerating output increases. The length of a potential US bank shutdown could significantly impact market performance, with longer closures typically leading to stock weakness and rate rallies.
