[New York Stock Market Briefing] Despite federal government shutdown, strong for 4th consecutive trading day…pharmaceutical sector 'surges'

Major indexes on the New York stock market rose. It was the fourth consecutive trading-day gain. Although the U.S. federal government shut down, optimism that it will be temporary gained traction.

On the 1st (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 46,441.10, up 43.21 points (0.09%) from the previous day; the Standard & Poor's (S&P) 500 index closed at 6,711.20, up 22.74 points (0.34%); and the Nasdaq Composite closed at 22,755.16, up 95.15 points (0.42%).

By the close, the S&P 500 and the Dow recorded new all-time highs. The S&P 500 also hit an intraday record high.

Although Congress failed to pass a continuing resolution (CR) and the federal government entered a temporary shutdown as of that day, the New York market continued its four-day run of gains. Historically, government shutdowns have seldom had a large negative impact on markets. Investors generally expected lawmakers to eventually reach a budget agreement.

Private employment fell far short of expectations, but that boosted hopes for rate cuts and lifted the market. According to the Automatic Data Processing (ADP) national employment report, private payrolls decreased by 32,000 in September from the prior month. This was far below the market forecast of a 50,000 increase, and August's figure was sharply revised from a 54,000 increase to a 3,000 decrease.

According to the CME FedWatch tool, the probability in federal funds futures of a 50bp rate cut by December was raised to 86.7%. It had been 77.3% near the previous day's close.

By sector, the healthcare sector was strong. Eli Lilly rose 8.18%, Pfizer rose in the 6% range, and Merck rose 7.39%. Optimism spread across drugmakers after Pfizer announced the previous day that it would lower prices on some medicines and invest $70 billion in the United States, securing a three-year tariff waiver.

By contrast, the materials sector fell more than 1%.

Among mega tech companies with market capitalizations over $1 trillion, only Meta fell 2.32% while the others all rose. Oracle also rose 2.76%, reclaiming the $800 billion market-cap level.

Canadian mining company Lithium Americas surged 23% after news that the U.S. Department of Energy acquired a 5% stake.

The CBOE Volatility Index (VIX) was 16.29, up 0.01 points (0.06%) from the previous session.

Han Kyung-woo Hankyung.com reporter case@hankyung.com