Stocks Churn as Trump Threatens Federal Job Cuts: Markets Wrap

(Bloomberg) — US equities’ race to fresh highs lost momentum as President Donald Trump weighed slashing “thousands” of federal jobs with a government shutdown extending into a second day.

Stocks traded sideways after starting off the session at records. The S&P 500 was flat in afternoon trading as Republicans sought to use the threat of permanent cuts to encourage Democrats to vote to reopen the government. The White House has said the firings could happen imminently. Trump plans to meet with White House Budget Director Russell Vought to discuss the plan.

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Traders are also contending with the temporary blackout in economic readouts after Thursday’s weekly initial jobless claims numbers were delayed by the government closure. If the shutdown extends the lack of data could put further interest-rate cuts in jeopardy. Figures from outplacement firm Challenger, Gray & Christmas showed US employers dialed back hiring plans in September, even though they also announced fewer job cuts.

The Bureau of Labor Statistics’ nonfarm payrolls data on Friday will also likely be delayed.

“A quick shutdown that sets back the report a few days might not move the needle, but a long one that also threatens release of mid-month inflation data might keep the Fed on the sidelines, unwilling to cut rates at its late October meeting without the data,” according to Joe Mazzola, head trading and derivatives strategist at Charles Schwab Corp. “There are signs that a standoff could be lengthy, with Treasury Secretary Scott Bessent saying a prolonged closure might hurt US economic growth.”

The dollar climbed, on track for its first advance after four-days of losses. The yield on the benchmark 10-year Treasury fell to 4.08%.

The Nasdaq 100 struggled to hold onto a rally to a second-consecutive all-time high after an OpenAI share sale catapulted the firm to the world’s most valuable startup with a valuation of $500 billion, bolstering optimism for artificial intelligence.

Among individual movers, Tesla Inc. fell 4.0% after reporting a surprise increase in quarterly vehicle sales. Vital Knowledge’s Adam Crisafulli said delivery numbers were “a lot better than the print forecast but actual expectations were a lot higher,” as bears see the electric-vehicle market poised for a downturn. The stock’s slump weighed on key US benchmarks.

In commodity markets, a rally in gold cooled after reaching a record while oil fell for a fourth consecutive day. West Texas Intermediate dipped below $61 a barrel, touching the lowest level in four months as expectations of OPEC+ restoring more idled supply deepened fears of a global glut.

Rate-Cut Bets

Money markets are still almost fully pricing a quarter-point Fed cut at the end of the month and a roughly 80% chance of another in December to support the labor market.

“If you really dig into the labor market data, it’s not just an AI structural story, it’s not just a lower immigration story, you are seeing that cyclical demand weakness,” Kim Crawford, global rates portfolio manager at JPMorgan Asset Management, told Bloomberg Television. “The clearest part to this puzzle is wage growth, there is a lack of wage growth in the US.”

Some strategists noted that past shutdowns have typically had little macroeconomic impact. 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 for days or weeks.

Corporate News:

TransUnion and Equifax Inc. slumped after Fair Isaac unveiled a program that lets mortgage lenders calculate and deliver FICO scores directly to customers. German artificial intelligence language platform DeepL is exploring a potential initial public offering in the US, according to people familiar with the matter. Warren Buffett’s Berkshire Hathaway Inc. reached a deal to buy Occidental Petroleum Corp.’s petrochemical business for about $9.7 billion in cash. Some of the main moves in markets:

Stocks

The S&P 500 was little changed as of 1:49 p.m. New York time The Nasdaq 100 rose 0.3% The Dow Jones Industrial Average rose 0.1% The MSCI World Index was little changed Currencies

The Bloomberg Dollar Spot Index rose 0.2% The euro fell 0.1% to $1.1719 The British pound fell 0.3% to $1.3440 The Japanese yen was little changed at 147.17 per dollar Cryptocurrencies

Bitcoin rose 1.9% to $119,810.36 Ether rose 3.3% to $4,478.03 Bonds

The yield on 10-year Treasuries declined two basis points to 4.08% Germany’s 10-year yield declined one basis point to 2.70% Britain’s 10-year yield advanced one basis point to 4.71% Commodities

West Texas Intermediate crude fell 2.1% to $60.48 a barrel Spot gold fell 0.5% to $3,844.89 an ounce This story was produced with the assistance of Bloomberg Automation.

–With assistance from James Hirai, Julien Ponthus, Andre Janse van Vuuren and Kwaku Gyasi.

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