On Thursday night, S&P futures exhibited a mixed performance following the S&P 500 reaching a new high, as investors seemingly dismissed worries related to the recent U.S. government shutdown. S&P 500 futures increased by 0.1%, whereas Nasdaq 100 futures rose by 0.3%. Futures associated with the Dow Jones Industrial Average declined by 30 points, representing a decrease of 0.06%. The principal indexes concluded the trading session on Wednesday with gains, buoyed by optimism that the funding interruption would be short-lived, thereby mitigating any significant repercussions on the economy.

The S&P 500 experienced an increase of approximately 0.3%, concluding the session at an unprecedented peak, whereas the Nasdaq Composite finished 0.4% higher. The Dow Jones Industrial Average experienced an increase of 43 points, reflecting a rise of 0.1%. The government shutdown commenced following the inability of leading Democrats and Republicans to reach a consensus by the deadline on a funding agreement. Lawmakers exchanged blame for the impasse, with Democrats maintaining a steadfast position on their insistence to utilize the measure for the extension of health care tax credits benefiting millions of Americans. The primary concern for investors centers on the duration of the existing stalemate. The situation is expected to extend for a minimum of three days, as the Senate will not be in session on Thursday in observance of Yom Kippur. Consequently, Friday will be the next opportunity for Senators to cast their votes. In prediction markets, participants are wagering that the shutdown may extend for almost two weeks.

“My belief is this shutdown could last even longer than in 2018 but that other factors will ultimately matter more such as 1) upcoming Q3 earnings being solid, 2) AI euphoria continuing with the Mag7 reporting solid quarters and 3) the next Fed meeting on 10/29 where I expect the Fed to stay on its course to cut rates three times this year,” Dan Niles, stated in a Tuesday post. “In summary, I believe that despite the potential for some near-term choppiness, the market will ultimately see new highs as it slowly grinds higher,” Niles added. The stock market has traditionally shown resilience in the face of government shutdowns; however, current investors are exhibiting heightened vigilance regarding this particular instance. This is largely attributable to the more unpredictable policy environment and macroeconomic conditions, alongside elevated market valuations and concentration levels that have emerged during the AI-driven rally, coupled with persistent inflation worries.

Furthermore, President Donald Trump has indicated the possibility of permanent mass firings of federal workers in the event of a shutdown, intensifying concerns regarding a decelerating labor market. The ongoing shutdown this week has led to an economic data blackout, with the September nonfarm payrolls report not being released on Friday due to the Labor Department’s suspension of nearly all operations. The Federal Reserve is anticipated to announce a reduction in interest rates at its forthcoming October meeting, following the release of Wednesday morning’s ADP data, which indicated a decline in private payrolls for the previous month. Additionally, the broader implications of the ongoing shutdown are yet to be fully understood. U.S. equities have concluded a robust third quarter and September, during which the S&P 500 recorded an increase exceeding 3% in a month that has historically averaged a 4.2% decline over the past five years.