Stocks Lifted by Health-Care, Tech; Bonds Gain: Markets Wrap

(Bloomberg) — Stocks rose slightly as Wednesday’s trading session progressed, boosted by gains in the health-care sector on optimism after Pfizer Inc.’s deal with the White House. US Treasuries rallied after private payrolls data cemented bets that the Federal Reserve will lower interest rates later this month.

After fluctuating between modest losses and gains, the S&P 500 was buoyed by health-care stocks like Eli Lilly & Co. and AbbVie Inc. along with a few big-tech names in afternoon trading in New York. The 10-year Treasury yield was around 4.11% after touching 4.08% earlier. The Bloomberg Dollar Spot Index was little changed.

Subscribe to the Stock Movers Podcast on Apple, Spotify and other Podcast Platforms.

The US government shutdown is threatening a blackout in crucial economic data that the Fed needs to make its decisions, which means economists and policymakers will rely more on private reports like the ones that came in on Wednesday.

The ADP report showed payrolls at US companies unexpectedly dropped in September, consistent with other data over the past month indicating that the labor market is slowing. That prompted traders to add to bets on two more Fed rate cuts this year. US factory activity shrank in September for a seventh straight month, according to the Institute for Supply Management.

The JOLTS report on Tuesday, meanwhile, signaled that demand for workers is slowing, giving traders another snapshot of the labor market at a time the Bureau of Labor Statistics’ nonfarm payrolls data will likely be delayed.

Given all this information, some investors don’t think the absence of Friday’s report will derail the Fed.

“We believe that even if the September nonfarm payroll report cannot be published before the Fed meeting, officials will have enough information about the labor market to deliver another 25bp ‘insurance’ cut at the October meeting,” said Atakan Bakiskan, US economist at Berenberg.

Others are also looking at previous shutdowns to determine that such events often don’t last long and often have a negligible macroeconomic impact.

“What sets this shutdown apart is the threat of permanent layoffs for non-essential federal staff, which, while possibly political bluster and subject to legal challenges, could prolong the drag on public sector payrolls,” Thomas Ryan, North America economist at Capital Economics, wrote in a note.

At a White House press conference on Wednesday, Vice President JD Vance said he doesn’t anticipate a long shutdown, adding that layoffs will come if it lasts days or weeks.

Stuart Kaiser, Citigroup’s head of US equity trading strategy, doesn’t really see the shutdown hurting stocks for now.

“For this to really impact equity markets you’re going to need it to last for a while, you’re going to need to see pretty large layoffs or something happen in the bond market to spill over into the equity market,” he said on Bloomberg Television on Wednesday.

What Bloomberg Strategists say…

“Late-in-the-year seasonality favors stocks as the dominant US asset, while the dollar has been doomed to be a laggard. This year is likely to follow that pattern, even as a US shutdown adds a new factor into the mix. It’s likely to cement the pattern of dollar weakness, given the tendency of shutdowns to hurt the greenback, and help bonds.”

— Kristine Aquino, Managing Editor, Markets Live

For the full analysis, click here.

On the long term, the government shutdown could magnify concerns about US policy stability, Lauren Goodwin, economist and chief market strategist at New York Life Investments, wrote in a note.

“Investors can operate under a simple rule of thumb: the longer a shutdown lasts, the greater its effects on consumer confidence, economic activity, and market outcomes,” she said.

Some of the main moves in markets:

Stocks

The S&P 500 rose 0.2% as of 1:55 p.m. New York time The Nasdaq 100 rose 0.3% The Dow Jones Industrial Average was little changed The MSCI World Index rose 0.2% Currencies

The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1725 The British pound rose 0.2% to $1.3474 The Japanese yen rose 0.5% to 147.18 per dollar Cryptocurrencies

Bitcoin rose 2% to $116,890.47 Ether rose 2.4% to $4,296.1 Bonds

The yield on 10-year Treasuries declined four basis points to 4.11% Germany’s 10-year yield was little changed at 2.71% Britain’s 10-year yield was little changed at 4.70% Commodities

West Texas Intermediate crude fell 1% to $61.74 a barrel Spot gold rose 0.1% to $3,863.63 an ounce This story was produced with the assistance of Bloomberg Automation.

–With assistance from Andre Janse van Vuuren, Emily Graffeo, Isabelle Lee and Vildana Hajric.

©2025 Bloomberg L.P.