Specialist traders work inside a booth on the floor at the New York Stock Exchange on Sept. 10, 2025.<\/p>\n
Brendan McDermid | Reuters<\/p>\n
The S&P 500<\/a> fell on Tuesday as a potential U.S. government shutdown loomed. Despite the latest declines, Wall Street was headed for an unusually strong September.<\/p>\n The broad market index dipped 0.2%, while the Nasdaq Composite<\/a> slid 0.3%. The Dow Jones Industrial Average<\/a> hovered just below the flatline.<\/p>\n Although shutdowns aren’t usually market-moving events, this time could be different<\/a> as investors are already wary about a slowing labor market, the risk of stagflation and elevated stock valuations. A shutdown could also prompt rating agencies<\/a> to rethink the condition of U.S. credit, which was downgraded in May by Moody’s.<\/p>\n House Speaker Mike Johnson, R-La., told CNBC<\/a> on Tuesday that he’s “skeptical” that a shutdown can be averted by the midnight deadline, saying that the outcome is in the hands of Senate Minority Leader Chuck Schumer, D-N.Y., and House Minority Leader Hakeem Jeffries, D-N.Y. Jeffries, meanwhile, said on CNBC<\/a> about Republicans that “if the government shuts down, it’s their decision to do it.”<\/p>\n If the U.S. government suspends operations, the Labor Department has said that the September nonfarm payrolls report scheduled to release Friday will not come out<\/a>. The report is one of several upcoming key data releases that will provide crucial information about the direction of the economy ahead of the Federal Reserve’s upcoming October policy meeting. Exacerbating concerns over the shutdown was President Donald Trump’s threat over the weekend that a shutdown could result in mass firings<\/a> of federal workers.<\/p>\n Jack Janasiewicz, lead portfolio strategist and portfolio manager at Natixis Investment Managers, said that a government shutdown could lead to some “tangential effects” in near-term market sentiment and volatility.<\/p>\n “With investors keenly aware of the risks to a softening labor market and simultaneously laser focused on the signs of tariff pass-through to inflation, any delay in the collection of economic data resulting from the shutdown could lead to increased uncertainty. And with that increased uncertainty we often see a pick-up in financial market volatility,” Janasiewicz said.<\/p>\n “Could such uncertainty be large enough to dent the economic backdrop and along with it risk assets? Probably not a lasting impact but the longer the uncertainty drags out, the greater the risk,” he said.<\/p>\n Echoing that view, Adam Crisafulli of Vital Knowledge anticipates that the shutdown would weigh on market sentiment if it were to last longer than a considerable amount of time, a situation that could delay important economic data releases<\/a>. Government shutdowns don’t often last beyond two weeks<\/a>.<\/p>\n “When it comes to Washington, the market widely expected a shutdown to happen, so investors are largely sitting tight for now, but if this extends beyond two weeks, people will start to become more concerned,” the firm’s founder said.<\/p>\n A strong September<\/p>\n