U.S. Government Shutdown Triggers Stock Market Decline and Economic Disruptions

The U.S. government officially entered a partial shutdown on October 1, 2025, after Congress failed to agree on a spending plan, causing stocks to decline as investor sentiment turned cautious. The S&P 500, Dow Jones Industrial Average, and Nasdaq all slipped, reflecting concerns about the economic impact of the shutdown, including potential disruptions to critical economic data releases like the upcoming labor-market report. Private-sector payrolls unexpectedly fell in September, deepening worries about the labor market's fragility amid a slowing economy and inflation challenges. The shutdown has led to federal workers facing furloughs without pay, with about 750,000 employees affected, and essential services like air traffic control staffed by unpaid workers. Some companies, such as Conagra Brands, reported better-than-expected earnings, but overall market volatility remains high due to political gridlock and economic uncertainty. Investors are watching closely for any progress on a budget deal, which could trigger a market rally, while a protracted stalemate might intensify downside pressure on risk assets.