Stocks mixed, gold hits record as US government shuts down
Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., April 21, 2025. REUTERS/Brendan McDermid
LONDON :Wall Street futures and the dollar stumbled on Wednesday, while gold struck a record high as the U.S. government shut down much of its operations, possibly delaying the release of crucial jobs data that could muddy the interest rate outlook.
With no clear path out of the impasse over a funding deal, agencies warned the government shutdown would halt the release of a closely watched September employment report and lead to the furlough of 750,000 federal workers at a daily cost of $400 million.
S&P 500 futures and Nasdaq futures dropped about 0.5 per cent each on Wednesday. Gold prices climbed to $3,895 an ounce, hitting a record high for a third straight session.
European shares bucked the global trend, with the pan-continental STOXX 600 up 0.7 per cent. Britain's FTSE 100 and Switzerland's SMI outperformed, boosted by healthcare stocks which jumped on expectations they could avoid excessive U.S. import tariffs after President Donald Trump struck a deal with Pfizer on prescription drug prices.
The healthcare sector has the third largest weighting in the STOXX 600.
"There's a lot of political risk in the healthcare sector but as you see this risk ease, investors will be buying," said Lars Skovgaard, senior investment strategist at Danske Bank.
"I think this could give some support to European shares over the next couple of days."
SHUTDOWN TO DELAY DATA
With Friday’s nonfarm payrolls report expected to be absent, investors may place greater weight on the ADP National Employment Report due later today. Forecasts are centred on a modest gain of 50,000 private-sector jobs.
"The general idea is that these things have a short-term impact, not a long-term one, and markets know it," said George Lagarias, chief economist at Forvis Mazars.
"The lack of data will mean we assume the trend we have will continue. If there is no evidence of a strong economic rebound then the chances are that the Fed will continue on its present course."
Futures now imply a 95 per cent chance of a rate cut from the Federal Reserve in October, up from 90 per cent from a day earlier, with around a 75 per cent probability of another move in December.
Anthony Saglimbene, chief market strategist at Ameriprise, said that if the shutdown lingers, September inflation reports in mid-October could also be negatively affected.
"An extended period where the U.S. Bureau of Labor Statistics is not operating at full strength could affect data collection efforts for other reports, which may impact the quality of the data," he said in a note.
Japan's Nikkei dropped 0.9 per cent on Wednesday after an 11 per cent surge the previous quarter. South Korean shares rose 0.9 per cent, adding to the 11.5 per cent gain in the last quarter, after data showed its exports rose at the fastest pace in 14 months in September.
Taiwan's shares gained 0.6 per cent. The island's top tariff negotiator said on Wednesday that Taiwan will not agree to a deal with Washington for half of all semiconductor production to take place in the U.S.
Chinese markets, including Hong Kong, were closed for a public holiday.
DOLLAR FALLS
In foreign exchange markets, the dollar index slipped for a fourth straight day and was last down 0.1 per cent to 97.71.
The euro rose 0.1 per cent to $1.1735, while sterling was up 0.3 per cent at $1.3483.
The dollar was off 0.6 per cent at 147.06 yen, after a Bank of Japan survey showed confidence among big Japanese manufacturers improved for a second quarter, heightening the chance of an interest rate hike as soon as this month.
In the Treasuries market, yields were steady in European morning trade. The benchmark U.S. 10-year Treasury yield was down 1 basis point at 4.137 per cent, having risen 1 basis point the day before.
Oil prices fell further after two consecutive days of losses as investors weighed potential OPEC+ plans for a larger output hike next month.
U.S. crude was down about 0.4 per cent at $62.14 a barrel, while Brent was 0.4 per cent lower at $65.79.
