U.S. stock futures pointed to a weaker start on Wednesday, with traders preparing for renewed volatility following several days of market gains. The cautious mood follows the federal government’s official shutdown overnight, after Congress failed to approve a stop-gap spending bill.
The stalemate stems from deep partisan differences. Democrats have pushed for the inclusion of extended Obamacare tax credits in the temporary funding plan, while Republicans argue the measure should first secure passage before such provisions are debated.
Investors are concerned about the economic fallout of the shutdown, but the immediate focus is on the potential delay of critical government data. The Labor Department’s September jobs report, one of the most closely watched indicators for monetary policy, was scheduled for release Friday but is now likely to be postponed.
Without official updates on employment or inflation, the Federal Reserve could face greater challenges in shaping its policy outlook this month. In the meantime, private reports may carry more weight. Payroll processor ADP reported Wednesday that private sector employment dropped by 32,000 in September, far below expectations for a 50,000 increase. The report marked the second straight month of job losses after a downwardly revised 3,000 decline in August.
On Tuesday, Wall Street traded sideways for most of the day as investors monitored developments in Washington. The major indexes swung between gains and losses before a late-session rally pushed them into the green. The S&P 500 advanced 0.4% to 6,688.46, the Nasdaq added 0.3% to 22,660.01, and the Dow rose 0.2% to 46,397.89.
Analysts said the rebound likely reflected some optimism that lawmakers might strike a last-minute compromise, or at least confidence that the economic effects of the shutdown would remain contained if it proves short-lived.
Separate data released Tuesday showed consumer confidence falling more sharply than expected in September. The Conference Board index dropped to 94.2 from 97.8 in August, hitting its lowest reading since April 2025.
Sector performance was mixed across the board. Pharmaceutical stocks were the standout, with the NYSE Arca Pharmaceutical Index climbing 3.7% to a six-month high. Pfizer surged 6.8% after announcing a deal with the Trump administration aimed at lowering prescription drug costs for U.S. patients.
Healthcare shares also saw strong gains, as did biotechnology, computer hardware, and networking names. By contrast, banks and energy producers came under pressure, weighing on broader market sentiment.
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