Weekly Market Commentary September 29th to October 3rd 2025
On October 1st, the U.S. federal government shut down after Republican and Democratic politicians failed to resolve a budget dispute. This means that some, but not all, government services are temporarily suspended, and 40% of the federal workforce are expected to be put on unpaid leave. The last shutdown was on December 22, 2018, and spanned 35 days, the longest of the 10 shutdowns experienced since 1981. As a result, data from the Bureau of Economic Analysis, Bureau of Labor Statistics, Census Bureau, and the Department of Agriculture may be delayed or postponed. Relevant data affected include the Employment Situation Report, GDP, CPI, and Agriculture reports.
This past week we were supposed to get a clearer picture of the labor market, but due to the shutdown, key data such as non-farm payrolls, unemployment, hourly wages, and jobless claims were not released. However, we did get data on outstanding jobs and ADP employment. JOLTS Job Openings stand at 7.2 million, a slight increase from last month. Openings were most plentiful in health care and professional and business services. The ADP National Employment report estimated that U.S. payrolls fell by 32,000 in September. However, ADP results alone are historically unreliable as the private payroll processor accounts for about 20% of U.S. employment and often deviates from the closely followed nonfarm payrolls number which was expected to show an increase of 51,000 jobs.
Other data we received included ISM Manufacturing and ISM Services. The data showed activity stalled in September, as Services activity came in below all estimates to a level that indicates stagnation. Manufacturing was no better, contracting for the seventh consecutive month, reflecting a pullback in orders.
The equity markets saw another positive week reaching all-time highs. The S&P 500 closed 1.0% higher to 6,716, the Nasdaq 1.3% higher to 22,780, and the Dow Jones Industrials 1.1% higher to 46,758. Bond yields fell on the week, with the 10-Year U.S. Treasury yield falling 5bps to 4.12%, and the 2-Year yield falling 6bps to 3.58%.
Next week there is very little economic data, so the markets will be looking for any progress regarding the government shutdown.
