U.S. Government Shutdown May Lead To Initial Pullback On Wall Street

(RTTNews) - The major U.S. index futures are currently pointing to a lower open on Wednesday, with stocks likely to move back to the downside after trending higher over the past few sessions.

The downward momentum on Wall Street comes after the U.S. government officially shot down early this morning after lawmakers failed to pass a temporary spending bill.

Democrats have demanded that any stop-gap funding bill include an extension of enhanced Obamacare tax credits, while Republicans have argued the issue should be debated after a funding bill is passed.

Worries about the economic impact of the shutdown may weigh on Wall Street, although traders may be more concerned that the shutdown delaying the release of crucial U.S. economic data.

The Labor Department had been scheduled to release its closely watched monthly jobs report on Friday, although the data is likely to be delayed due to the shutdown.

Traders are worried that the lack of official data on employment and potentially inflation could affect the Federal Reserve's monetary policy decision this month.

The Fed may have to rely on other sources of data, including a report released by payroll processor ADP this morning showing an unexpected decrease by private sector employment in the month of September.

ADP said private sector employment fell by 32,000 jobs in September after dipping by a revised 3,000 jobs in August.

Economists had expected private sector employment to climb by 50,000 jobs compared to the addition of 54,000 jobs originally reported for the previous month.

After moving mostly higher over the two previous sessions, stocks fluctuated over the course of the trading day on Tuesday. The major averages bounced back and forth across the unchanged line for much of the session before a late-day advance.

The upward move seen going into the end of the day helped the major averages close in positive territory. The S&P 500 climbed 27.25 points or 0.4 percent to 6,688.46, the Nasdaq rose 68.86 points or 0.3 percent to 22,660.01 and the Dow increased 81.82 points or 0.2 percent at 46,397.89.

The choppy trading seen for much of the day came as traders kept an eye on developments on Washington, as lawmakers struggled to reach an agreement to avert a government shutdown.

The late-day strength on Wall Street may have reflected hopes lawmakers will reach a last-minute agreement, as they often do, or optimism a government shutdown will not have a major impact on the economy.

Meanwhile, traders largely shrugged off a Conference Board report showing a bigger than expected decrease by its reading on U.S. consumer confidence in the month of September.

The Conference Board said its consumer confidence index slid to 94.2 in September from an upwardly revised 97.8 in August. Economists had expected the consumer confidence index to dip to 96.0 from the 97.4 originally reported for the previous month.

With the bigger than expected decrease, the consumer confidence index dropped to its lowest level since April 2025.

Pharmaceutical stocks moved sharply higher over the course of the session, driving the NYSE Arca Pharmaceutical Index up by 3.7 percent to a six-month closing high.

Pfizer (PFE) helped lead the sector higher, soaring by 6.8 percent after announcing an agreement with the Trump Administration the drug giant said will ensure U.S. patients pay lower prices for their prescription medicines.

Substantial strength also emerged among healthcare stocks, as reflected by the 2.4 percent surge by the Dow Jones U.S. Health Care Index.

Biotechnology, computer hardware and networking stocks also saw considerable strength, while oil producer and banking stocks showed notable moves to the downside.

Commodity, Currency Markets

Crude oil futures are falling $0.44 to $61.93 a barrel after tumbling $1.08 to $62.37 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $3,908.80, up $35.60 compared to the previous session's close of $3,873.20. On Tuesday, gold climbed $18.

On the currency front, the U.S. dollar is trading at 146.81 yen compared to the 147.90 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1752 compared to yesterday's $1.733.

Asia

Asian stocks ended mixed in thin trading on Wednesday, with mainland Chinese and Hong Kong markets closed for the National Day holiday.

The United States has entered a federal government shutdown, the first in nearly seven years, after a stopgap funding bill failed.

The shutdown could delay crucial economic reports, including Friday's non-farm payrolls data, which are vital for the Federal Reserve's interest rate decisions.

Japanese markets ended sharply lower as the yen extended gains for a fourth straight session, pressured by the U.S. government shutdown and anxiety ahead of the leadership election for the ruling Liberal Democratic Party.

Sentiment was also dented by a survey that showed Japan's manufacturing activity shrank at the fastest pace in six months in September.

On the contrary, a central bank survey revealed that sentiment among Japan's large manufacturers improved for a second straight quarter.

The Nikkei 225 Index slid 0.9 percent to 44,850.85, while the broader Topix Index settled 1.4 percent lower at 3,094.74.

Financial stocks paced the declines, with Dai-ichi Life Holdings and Mizuho Financial Group both tumbling around 4 percent.

Seoul stocks advanced after the release of better-than-anticipated September export data. The Kospi jumped 0.9 percent to 3,455.83, led by gains by semiconductors, energy and shipbuilding shares.

Samsung Electronics rallied 2.5 percent and its rival SK Hynix surged 3.6 percent ahead of a meeting between President Lee Jae Myung and OpenAI CEO Sam Altman later in the day.

Australian markets closed on a flat note as the Reserve Bank of Australia's latest remarks cast doubt on chances of a November rate cut.

Banks, mining and energy stocks declined, offsetting gains among gold miners. BHP fell 2.5 percent on concerns about China's reported pause of iron ore purchases from the company.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index shot up 1.1 percent to 13,433.99 after the government's announcement of energy sector reforms.

Europe

European stocks have moved mostly higher on Wednesday even as the United States government has shut down after the Senate failed to pass a short-term spending bill.

The U.K.'s FTSE 100 Index is up by 0.6 percent, the French CAC 40 Index is up by 0.4 percent and the German DAX Index is up by 0.e percent.

In economic news, a survey showed U.K. house price growth accelerated in September amid easing borrowing costs.

House prices logged annual growth of 2.2 percent in September, slightly faster than the prior month's 2.1 percent rise, according to data from the mortgage lender Nationwide Building Society. The annual increase was forecast to ease to 1.8 percent.

On a monthly basis, house prices rebounded 0.5 percent after a 0.1 percent dip in August. This was also faster than economists' forecast of 0.2 percent.

Pharma stocks are surging after Pfizer reached a deal with the U.S. government to lower prescription drug prices in exchange for tariff relief.

Vallourec, a provider of tubular solutions for the energy sector, has also jumped after securing a new order from Petrobras for over 30 units of Submagnetic Free Flow, its Oil Country Tubular Goods (OCTG) solution designed to prevent scaling in production pipes.

British baker and fast-food chain Greggs has also soared as it reported 6.1 percent sales growth over the third quarter of 2025.

French engineering & technology company Technip Energies has also advanced on receiving two engineering services contracts from Repsol for the development of the Ecoplanta Molecular Recycling Solutions (Ecoplanta) project.

Spirits major Diageo has also moved to the upside after pricing €1 billion of fixed rate bonds under its European Debt Issuance Program.

Dutch engineering consultancy Arcadis has also moved sharply higher following share buyback news.

Meanwhile, Tate & Lyle, Plc, one of the world's biggest producers of sweeteners, has plunged after lowering its revenue and Ebitda outlook for the year ending March 31.

U.S. Economic News

Private sector employment in the U.S. unexpectedly decreased in the month of September, according to a report released by payroll processor ADP on Wednesday.

ADP said private sector employment fell by 32,000 jobs in September after dipping by a revised 3,000 jobs in August.

Economists had expected private sector employment to climb by 50,000 jobs compared to the addition of 54,000 jobs originally reported for the previous month.

"Despite the strong economic growth we saw in the second quarter, this month's release further validates what we've been seeing in the labor market, that U.S. employers have been cautious with hiring," said ADP chief economist Dr. Nela Richardson.

At 10 am ET, the Institute for Supply Management is scheduled to release its report on manufacturing activity in the month of September. The ISM's manufacturing PMI is expected to inch up to 49.0 in September from 48.7 in August, but a reading below 50 would still indicate contraction.

The Commerce Department is also due to release its report on construction spending in the month of August at 10 am ET. Construction spending is expected to edge down by 0.1 percent in August, matching the dip seen in July.

At 10:30 am ET, the Energy Information Administration is scheduled to release its report on crude oil inventories in the week ended September 26th. Crude oil inventories are expected to increase by 1.5 million barrels after slipping by 0.6 million barrels in the previous week.

Richmond Federal Reserve President Thomas Barkin is due to speak before an Economic Outlook Conference hosted by the University of North Carolina, Wilmington Swain Center at 12:15 pm ET.