United States equities extended gains on Wednesday (Thursday AEST), with the Dow and S&P 500 setting fresh record highs as investors wagered that the U.S. government shutdown would be short-lived and have only limited economic fallout.
The Dow Jones Industrial Average advanced 43.2 points, or 0.1%, to 46,441.1. The S&P 500 climbed 22.7 points, or 0.3%, to 6,711.2, while the Nasdaq Composite rose 95.2 points, or 0.4%, to close at 22,755.2.
Healthcare shares led the rally after Pfizer struck a deal with the Trump administration. The company agreed to lower prescription drug prices in the Medicaid program compared to other developed nations, in return for tariff relief.
President Donald Trump said he expected more pharmaceutical firms to follow suit.
While materials stocks lagged overall, Lithium Americas surged 23.3% and rival Albemarle gained 4.2%. The U.S. Department of Energy disclosed it had taken a 5% stake in Lithium Americas and a further 5% holding in its joint venture with General Motors.
Investors turned to private-sector employment data as the government shutdown raised doubts over the release of official labour statistics. The ADP Employment Report showed a decline of 32,000 payrolls in September, compared with expectations for a 50,000 gain.
August figures were also revised to a 3,000 fall from a previously reported 54,000 increase, marking the weakest reading since March 2023.
Meanwhile, the U.S. government shutdown began on Tuesday after the Republican-led Senate failed to secure a temporary spending bill.
Democrats sought to use the measure to extend healthcare tax credits, a key sticking point in negotiations.
The Congressional Budget Office estimated that about 750,000 federal workers will be furloughed.
President Trump has threatened permanent layoffs of federal employees if the impasse drags on, heightening concerns about broader economic risks.
Vice President JD Vance acknowledged at a White House briefing that job cuts were possible but said no final decisions had been made.
He added that he expected the shutdown would be short, noting “some evidence that moderate Democrats are cracking a little bit”.
Markets are now focused on how long the shutdown will last, with a prolonged stoppage set to delay key economic data ahead of the Federal Reserve’s late October policy meeting.
The Labor Department confirmed it would suspend nearly all operations, meaning the widely watched nonfarm payrolls report will not be released this week.
On the bond markets, yields eased, with the 10-year Treasury slipping 1.3% to 4.1% and the 2-year note down 2.3% to 3.535%.
