AE Wealth Management: Weekly Market Insights | 9/28/25 – 10/4/25
Weekly Market Commentary
THE WEEK IN REVIEW: Sept. 28 – Oct. 4, 2025
Government shuts down — what’s next?
It seems there’s always a crisis somewhere these days. This year alone, we’ve endured the tariffs, the Big Beautiful Bill drama and multiple international flare-ups. Now we have the government shutdown, which started on Oct. 1.1
Every crisis impacts markets in different ways. So far, the government shutdown of 2025 hasn’t impacted the markets negatively (although it’s still early in the game). We hit all-time new highs in all the major indexes last week, with the S&P 500 over 6,700, the Dow nearing 47,000 and the Nasdaq getting close to 23,000.2,3,4
The last federal government shutdown was during the first Trump administration and started over funding for the border wall.5 That shutdown lasted 35 days and spanned the holidays from December 2018 through January 2019.
This shutdown is purportedly over the Affordable Care Act (ACA, also known as Obamacare). Like the border wall discussion, the ACA has been a political hot potato for well over a decade.
Specifically at issue is maintaining government subsidies for the ACA, without which policies and premiums would be much less affordable. The Republicans want a clean continuing resolution and to keep negotiating with Democrats on what spending they think is important. (This sounds good on the surface but basically will result in nothing meaningful because the Republicans hold all the levers of power. It’s just political rhetoric to make it look like the Republicans are willing to work with the Democrats.) Meanwhile, the Democrats are bent on trying to undo the parts of the Big Beautiful Bill they don’t like.
The sad reality: When this is over, both sides will lose. The media will paint Republicans as heartless, while Democrats may be labeled as “crybabies” for not accepting that elections have consequences. Who blinks first is anyone’s guess — but as mentioned earlier, markets seem to be moving forward.
Obviously, the longer this goes on, the potential for serious damage to the economy and markets will increase. But markets have done fine overall during shutdowns in the recent past and that appears to be the case this time around, as well.6
The other risk to the federal government is that the longer this goes on and people don’t notice a significant difference in their lives, the more they’ll question the size of our government and our massive federal debt. There’s also the possibility that the Trump administration will use the shutdown to permanently trim the federal workforce, something the Department of Government Efficiency (DOGE) task force tried to do but was blocked.
Markets aren’t fazed by the shutdown yet, but we can’t expect things to continue as they are with any certainty. Still, we’ve weathered government shutdowns before and we will again in the future. Don’t let the crisis du jour derail your plans.
Jobs deteriorate as shutdown clouds data
We didn’t get the September Bureau of Labor Statistics (BLS) employment situation last Friday because of the federal government shutdown. The last time we didn’t get the BLS job report was back in 2013, during a 16-day shutdown in early October. Ironically, that shutdown was a standoff over funding for the ACA as well.7
There was jobs data last week, but it wasn’t great. The ADP employment report last Wednesday showed a loss of 32,000 private-sector jobs in September versus an expected +50,000.8 And the Job Openings and Labor Turnover Summary (JOLTS) report showed openings rose from 7.208 million to 7.227 million in August.9 (Consensus was calling for another monthly decline in openings to 7.1 million.)
The data is obviously mixed, and it’s also incomplete thanks to the shutdown. Here’s what we know: Jobs for the past year weren’t as strong as reported, with a large number of jobs being created due to hiring in the government and sectors highly aligned with government spending (education and health care) or low-paying hospitality jobs (leisure, lodging, etc.).
That isn’t the recipe needed for a robust economy, and not having timely data makes forecasting harder. It’s a lot like flying a plane or sailing a boat at night into a fog — not the best time for your electronics to go out. You can do OK on a clear night, but not when the weather moves in. At a time when we need to be closely monitoring jobs to gauge the health of the economy and the direction of interest rates, we don’t have all the data we need to make informed decisions. It’s a cause for concern.
Coming this week
- The federal shutdown will likely continue this week unless there is a breakthrough in negotiations. Each side continues to blame the other for the shutdown.
- There will be plenty of Federal Reserve speakers on the circuit this week. Perhaps one of them will address the shutdown’s potential impact on the economy.
- On Wednesday, we’ll see MBA mortgage applications and the minutes from the September Fed meeting, which should be spicier than usual.
- Thursday will include weekly unemployment claims if the shutdown comes to an unexpected end in time to report them. Consumer sentiment will close out the week on Friday.
Index Performance Returns % | |||||
| 1 WK | YTD | 1YR | 3YRS | 5YRS | |
| S&P 500 | 1.09% | 14.18% | 17.82% | 22.22% | 14.93% |
| NASDAQ | 1.32% | 17.97% | 27.13% | 28.19% | 15.52% |
| DJIA | 1.10% | 9.91% | 11.30% | 16.61% | 11.05% |
Interest Rates: | |||||
| 10/3/2025 | 9/26/2025 | ||||
| UST 10 YR Government Bond Yield | 4.12% | 4.18% | |||
| Germany 10 YR | 2.71% | 2.75% | |||
| Japan 10 YR | 1.66% | 1.64% | |||
| 30 YR Mortgage | 6.36% | 6.33% | |||
| Oil | $60.70/ppb | $65.18/ppb | |||
| Regular Gas | $3.13/ppg | $3.13/ppg | |||
| All data as of Oct. 3, 2025 | |||||
Sources:
1 Maureen Chowdhury and Fadel Allassan. CNN. Oct. 5, 2025. “Shutdown enters a new week with Congress still at odds over funding the government.” https://www.cnn.com/politics/live-news/government-shutdown-news-10-05-25. Accessed Oct. 5, 2025.
2 Yahoo! Finance. “S&P 500 (ˆGSPC).” https://finance.yahoo.com/quote/%5EGSPC/. Accessed Oct. 5, 2025.
3 Yahoo! Finance. “Dow Jones Industrial Average (ˆDJI).” https://finance.yahoo.com/quote/%5EDJI/. Accessed Oct. 5, 2025.
4 Yahoo! Finance. “NASDAQ Composite (ˆIXIC).” https://finance.yahoo.com/quote/%5EIXIC/. Accessed Oct. 5, 2025.
5 Rachel Treisman. NPR. Oct. 1, 2025. “When will the government reopen? Here’s how long past shutdowns lasted.” https://www.npr.org/2025/10/01/nx-s1-5559267/government-shutdown-length-history. Accessed Oct. 5, 2025.
6 Dan Burrows. Kiplinger. Oct. 1, 2025. “What Does a Government Shutdown Mean for Stocks?” https://www.kiplinger.com/investing/what-does-a-government-shutdown-mean-for-stocks. Accessed Oct. 5, 2025.
7 David Wessel. Brookings. Oct. 1, 2025. “What is a government shutdown?” https://www.brookings.edu/articles/what-is-a-government-shutdown-and-why-are-we-likely-to-have-another-one/. Accessed Oct. 5, 2025.
8 ADP Research. September 2025. “ADP® National Employment Report.” https://adpemploymentreport.com/. Accessed Oct. 5, 2025.
9 U.S. Bureau of Labor Statistics. Sept. 30, 2025. “Job Openings and Labor Turnover Summary.” https://www.bls.gov/news.release/jolts.nr0.htm. Accessed Oct. 5, 2025.
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