Wall Street futures and the U.S. dollar faced declines on Wednesday as gold prices reached a new record high amid a government shutdown that is likely to delay the publication of key jobs data, clouding the future interest rate outlook.
With negotiations over a funding deal stalled, government agencies indicated that the shutdown would disrupt the release of the vital September employment report and result in the furlough of approximately 750,000 federal workers, accumulating a daily cost of $400 million.
S&P 500 and Nasdaq futures both fell around 0.5%. In contrast, gold prices surged to $3,895 per ounce, marking a record high for the third consecutive session.
European markets bucked the downward trend; the pan-European STOXX 600 index rose by 0.7%. The UK’s FTSE 100 and Switzerland’s SMI outperformed, largely driven by healthcare stocks, which rallied following President Donald Trump’s agreement with Pfizer regarding prescription drug pricing, alleviating fears of excessive U.S. tariffs on those sectors.
“The alleviation of political risk in the healthcare sector is encouraging for investors,” said Lars Skovgaard, senior investment strategist at Danske Bank. “This may support European shares in the coming days.”
Shutdown Delays Data
With the absence of Friday’s nonfarm payroll report anticipated, market focus shifted to the ADP National Employment Report expected later today, with predictions signaling a modest increase of 50,000 private sector jobs.
George Lagarias, chief economist at Forvis Mazars, noted, “These issues typically have a short-term impact rather than a long-term one, and market participants understand this.” He added that the lack of data would lead to assumptions that current trends would persist, which may affect the Federal Reserve’s approach if strong economic recovery remains unestablished.
Market futures now reflect a 95% probability of a rate cut by the Federal Reserve in October, an increase from 90% a day prior, along with a 75% likelihood of another cut in December.
Anthony Saglimbene, chief market strategist at Ameriprise, warned that a prolonged shutdown could disrupt September inflation reports due in mid-October. “A prolonged shutdown where the U.S. Bureau of Labor Statistics is not fully operational could hinder data collection for other reports, impacting overall data quality,” he noted.
Japan’s Nikkei index declined by 0.9% on Wednesday, following an 11% increase in the previous quarter. In contrast, South Korea’s shares rose by 0.9%, adding to an impressive 11.5% gain last quarter, buoyed by a report showing its exports growing at the fastest rate in 14 months in September.
Taiwan’s market increased by 0.6%, amidst statements from its chief tariff negotiator asserting that Taiwan would not consent to an agreement with Washington for half of all semiconductor production to occur in the U.S.
Chinese markets, including Hong Kong, remained closed for a public holiday.
Dollar Declines
In the foreign exchange markets, the dollar index decreased for the fourth consecutive day, falling 0.1% to 97.71. The euro appreciated by 0.1% to $1.1735, while the British pound rose 0.3% to $1.3483.
The dollar also slipped 0.6% against the yen to 147.06, influenced by a Bank of Japan survey indicating that confidence among large Japanese manufacturers improved for a second quarter, raising expectations of a potential interest rate hike this month.
In the Treasury market, European morning trade saw yields remain steady, with the benchmark U.S. 10-year Treasury yield decreasing by 1 basis point to 4.137%.
Oil prices continued to decline for a third straight day as investors assessed possible OPEC+ strategies for a larger output increase in the upcoming month. U.S. crude fell approximately 0.4% to $62.14 per barrel, while Brent dropped 0.4% to $65.79.
Published on October 1, 2025.
