Fundstrat
Fundstrat Explains Why This Shutdown Might Be Different for Markets
10/3/2025, 3:10:29 PM
Economic Summary
- Historically shutdowns have limited market impact—Fundstrat data shows the S&P 500 is up about 60% of the time one month after a shutdown ends—so headlines often matter more than fundamentals for short-term moves.
- This shutdown is different because the BLS monthly jobs report will be delayed, removing a primary public data benchmark while private ADP (ADP) data showed weakness, complicating Fed decision-making and investor confidence.
- ADP's weak private payroll print increases the narrative that the labor market is cooling; without BLS benchmarking, private data cannot fully substitute for official statistics and may exaggerate uncertainty.
- Markets are shifting toward pricing an October rate cut, but Fundstrat cautions cuts should be 'insurance' rather than a 'rescue'—cuts in a clearly slowing economy tend to produce worse stock reactions.
- An immigration crackdown has contributed to sustained job losses in sectors that rely on undocumented workers (construction, wholesale trade, manufacturing, professional services), limiting labor supply and potential GDP growth.
Bullish
- S&P 500 hit record close, signaling investor resilience.
- Fed governance developments (Lisa Cook allowed to stay) support market confidence.
- Markets increasingly price an October rate cut, which could boost equities.
Bearish
- Government shutdown could accelerate government job losses and remove key economic data (BLS).
- Weak ADP payrolls point to a slowing labor market, raising recession/rescue-rate-cut risks.
- Immigration crackdown has driven multi-month job losses in construction and manufacturing.
- Missing BLS data makes Fed decisions harder and increases policy uncertainty.
Bullish tickers
S&P 500
Bearish tickers
ADP
ADP
Bullish
As a private payroll data provider, ADP remains a widely watched indicator and will gain attention during BLS gaps.
Bearish
Weak ADP payrolls signal a cooling labor market and raise uncertainty about economic momentum.
S&P 500
Bullish
Closed at record levels (above 6,700), reflecting investor resilience and optimistic rate-cut expectations.
Bearish
Index may face downside if missing BLS data and labor weakness prompt a policy misstep or growth scare.
People mentioned
Hardika SinghErica McIntyreLisa Cook