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US government shutdown shakes markets, stocks fall while gold hits historic record

2025-10-01 09:20:28Kosova&Bota SHKRUAR NGA REDAKSIA VOX
US government shutdown shakes markets, stocks fall while gold hits historic
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Financial markets reacted negatively to the US government shutdown on Wednesday, with stocks falling, gold prices rising to record levels, and the dollar weakening. The unresolved situation is expected to affect key economic data releases and create uncertainty about the Federal Reserve's interest rate policies.

With no budget deal in sight, officials warned that the September jobs report, one of the most important for markets, will not be released. In addition, 750,000 federal employees have been placed on furlough, at a daily cost to the US economy of $400 million.

Reuters reports that both S&P 500 and Nasdaq futures fell 0.5% on Wednesday. Gold prices rose to $3,875 an ounce, hitting a record high for the third time in a row. European futures were little changed, while Asian markets were mixed.

According to analyst Anthony Saglimbene of Ameriprise, if the shutdown lasts, the September inflation reports, which are released in mid-October, could be negatively affected, due to a lack of operational capacity at the Bureau of Labor Statistics.

This increases uncertainty about monetary policy. Markets now expect a 96% certainty of a Federal Reserve interest rate cut in October (up from 90% the day before). And a 74% chance of another cut in December.

According to analyst Kyle Rodda of Capital.com, previous closures have not had a major impact on the markets, and even during the longest closure in 2018–2019, Wall Street recorded growth.

"But now we have two risks: the lack of employment data and President Trump's threat of permanent layoffs, which could cause a shock to the labor market," he warned.

Oil and US government bonds

-US crude rose 0.4% to $62.64 per barrel,

Brent also rose 0.4% to $66.32 a barrel.
The gain comes after two days of declines as investors weigh the possibility of increased production by OPEC+ against a drawdown in U.S. inventories.

In the bond market, yields remained steady in Asia. The 10-year US Treasury note was unchanged at 4.1522%.

As the government shutdown continues and uncertainty grows, investors and analysts are paying close attention to developments in Washington, hoping for a budget solution that would restore stability to global financial markets. If the situation drags on, the consequences could be felt more deeply in the U.S. economy and monetary policy.


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