Dow Jones and S&P500: US Stocks Firm as Shutdown Concerns Take a Back Seat

Dow Turns Positive, S&P 500 Recovers as Traders Downplay Shutdown Risk

U.S. stocks turned higher into the mid-session Wednesday, with the Dow flipping green and the S&P 500 paring early losses, as traders shrugged off government shutdown concerns and refocused on rate cut bets following soft jobs data.

The Dow last traded up 14 points to 46,412, while the S&P 500 ticked back to near flat at 6,687. The Nasdaq held just slightly lower, down 0.04%, but also well off its session lows. Futures showed resilience earlier in the day, recovering from an initial risk-off tone.

Will the Federal Reserve Shift Course After ADP Miss?

The ADP National Employment Report showed private payrolls fell by the most in over two years, reinforcing speculation that the Fed may have to pivot sooner than expected. Traders are increasing bets on a 25-basis-point cut, seeing evidence that the labor market is starting to cool. While the Fed has kept a hawkish tone, this data point gives markets a reason to price in policy easing without recession fears dominating the narrative—at least for now.

Is the Government Shutdown Losing Its Market Impact?

Despite headlines around a looming federal shutdown, the market response has been measured. Historically, shutdowns haven’t sparked major selloffs, and Wednesday’s recovery suggests traders are treating it as a manageable risk. However, delays to key economic reports—especially Friday’s nonfarm payrolls—could complicate Fed decision-making. For now, the shutdown risk appears priced in unless the situation drags well into October.

What’s Moving in Key Sectors and Stocks?

Healthcare led the S&P 500, gaining 1.4%, boosted by strong upside in Moderna and Regeneron—each rising over 6.3%.

Tech and communications names weighed early, with Meta down 2.8% and Alphabet off 1.1%, though losses have stabilized.

Nvidia dipped 0.9%. Nike added 3.4% on upbeat quarterly sales, and AES surged 13.3% after a takeover report involving BlackRock’s infrastructure arm.

Corteva fell 7.2% on plans to split its seed and pesticide units, while GE Vernova dropped 2.1% following a downgrade.

Market Outlook: Where Is the Tape Headed Into the Close?

With the Dow firming and the S&P 500 back near breakeven, the market tone is improving.

S&P 500 E-mini futures held support near 6,624 and remain comfortably above the 50-day moving average at 6,554.81.

Nasdaq futures have also bounced from intraday lows around 24,633 to trade near 24,900.

Traders are watching for Fed commentary later today.

If shutdown fears continue to fade and rate cut hopes stay intact, risk appetite could build into the close.

More Information in our Economic Calendar.