US Stocks Lose Momentum Amid Donald Trump’s Shutdown Threats: Markets Wrap

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. After opening at a record, the S&P 500 erased gains to edge lower as Republicans sought to use the threat of permanent cuts to the federal bureaucracy to encourage Democrats to vote to reopen the government.

The White House has said firings could happen imminently. Trump plans to meet with White House Budget Director Russell Vought to discuss the potential cuts. 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 1.7% 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.

The dollar climbed while the yield on 10-year Treasuries rose to 4.11% as traders contend with the temporary blackout in economic data amid the government shutdown.

Thursday’s weekly initial jobless claims numbers were delayed, the Bureau of Labor Statistics’ nonfarm payrolls data on Friday will also likely be delayed. Still, figures from outplacement firm Challenger, Gray & Christmas showed US employers dialed back hiring plans in September, even though they also announced fewer job cuts.

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

Money markets are fully pricing a quarter-point Fed cut at the end of the month and around an 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.”

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.

Elsewhere, Europe’s Stoxx 600 rose 0.4%. In Asia, equities rose past last month’s record close as chipmakers rallied.

• 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 fell 0.2% as of 11 a.m. New York time

• The Nasdaq 100 was little changed

• The Dow Jones Industrial Average fell 0.2%

• The Stoxx Europe 600 rose 0.4%

• The MSCI World Index fell 0.1%

Currencies

• The Bloomberg Dollar Spot Index rose 0.2%

• The euro fell 0.2% to $1.1713

• The British pound fell 0.4% to $1.3420

• The Japanese yen fell 0.2% to 147.33 per dollar

Cryptocurrencies

• Bitcoin rose 1.1% to $118,901.48

• Ether rose 0.9% to $4,376.16

Bonds

• The yield on 10-year Treasuries was little changed at 4.10%

• Germany’s 10-year yield was little changed at 2.71%

• Britain’s 10-year yield advanced two basis points to 4.71%

Commodities

• West Texas Intermediate crude fell 1.2% to $61.04 a barrel

• Spot gold fell 0.6% to $3,840.83 an ounce

This story was produced with the assistance of Bloomberg Automation.