Stocks reached new highs on Wednesday, with the S&P 500 rising by 0.3% to surpass its previous record set last week. The Dow Jones Industrial Average gained 43 points, or 0.1%, while the Nasdaq composite increased by 0.4%.
The bond market saw a more pronounced reaction as Treasury yields dropped after a report from ADP Research indicated that employers outside the government cut 32,000 more jobs than they added in the past month. The Midwest experienced particularly significant job losses. Additionally, ADP revised its August employment numbers downward to show a loss of 3,000 jobs instead of the previously reported gain of 54,000.
Typically, investors look to the U.S. government’s monthly jobs report for a broader view of labor market conditions because it uses data from a larger sample of employers than ADP’s survey and is considered more reliable for predicting economic trends. However, due to the ongoing U.S. government shutdown that began just after midnight, this month’s Labor Department report—scheduled for Friday—is expected to be delayed.
“Whether this is an accurate statistic or not, people in the markets believe that it signals something,” said Carl Weinberg, chief economist at High Frequency Economics. “The signal from today’s headline will not be a good one.”
Wall Street hopes for a controlled slowdown in hiring: enough to prompt further interest rate cuts by the Federal Reserve but not so much as to trigger a recession. Delays in official economic reports increase uncertainty about whether this balance can be maintained.
Historically, both stock markets and the economy have weathered short government shutdowns without major disruption. However, concerns remain that this shutdown could differ if it leads to large-scale federal worker layoffs.
Among individual stocks, Nike shares rose by 6.4% after exceeding analysts’ profit expectations for the latest quarter and reporting strong apparel sales growth in North America.
Lithium Americas’ U.S.-traded shares jumped 23.3% following news that it can access a previously announced $2.26 billion loan from the U.S. government; as part of this agreement, the Department of Energy will take an ownership stake in the Vancouver-based company. Lithium Americas is developing a lithium project in Nevada with General Motors—a move similar to recent government investments in companies like Intel.
Peloton Interactive fell by 3.7% after unveiling new AI-driven equipment that received little enthusiasm from investors.
Corteva dropped 9.1% after announcing plans to split into two separate companies focusing on seeds and crop protection respectively.
Cal-Maine Foods declined by 1.2% as its quarterly profit and revenue missed analyst forecasts.
By market close, the S&P 500 stood at 6,711.20 (up by 22.74 points), Dow Jones at 46,441.10 (up by 43.21), and Nasdaq at 22,755.16 (up by 95.15).
European stock indexes also rose following mixed results across Asian markets.
In bonds, yields on ten-year Treasurys fell from Tuesday’s late level of 4.16% down to 4.10%. This decline followed both weak payroll data from ADP and another report showing lower-than-expected manufacturing activity last month.
Manufacturers responding to an Institute for Supply Management survey cited ongoing difficulties due to tariffs; one respondent stated: “Steel tariffs are killing us.”
