Stock futures remained flat on September 29, 2025, as investors prepared to conclude an unusually strong month. According to CNBC, futures tied to the Dow Jones Industrial Average fell 3 points, while S&P 500 futures slipped 0.02% and Nasdaq 100 futures declined 0.03%. The S&P 500 gained more than 3% during September, while the Nasdaq Composite rose 5.3% and the Dow added 1.7%. These gains came as artificial intelligence stocks recovered from previous week losses and investors absorbed concerns about rising debt and energy constraints.

The third quarter concluded Tuesday with the S&P 500 up 7.4% and the Nasdaq set to post an 11% quarterly gain. Charles Schwab reported the S&P 500 was on pace for its best September in 15 years, helped by Federal Reserve rate cuts and continued AI optimism. BMO Capital Markets chief investment strategist Brian Belski raised his year-end S&P 500 forecast to 7,000, citing strong earnings growth between 8% and 10% expected for next year.

Government Shutdown Threatens Key Economic Reports

The threat of a federal government shutdown loomed over markets with an October 1 funding deadline approaching. Vice President JD Vance stated after a Monday White House meeting that "I think we're headed to a shutdown because the Democrats won't do the right thing." The Labor Department announced the September nonfarm payrolls report scheduled for Friday release would not come out if government operations suspend. This report provides information about the economy ahead of the Federal Reserve's October policy meeting.

CBS News reported each week of a shutdown typically costs the U.S. economy about $7 billion, according to EY-Parthenon Chief Economist Gregory Daco. President Donald Trump threatened over the weekend that a shutdown could result in mass firings of federal workers. The Bureau of Labor Statistics would not issue any economic reports during a shutdown, including the monthly jobs report. Jack Janasiewicz, lead portfolio strategist at Natixis Investment Managers, said any delay in economic data collection could lead to increased market volatility.

Labor Market Concerns Meet Federal Reserve Policy

The Federal Reserve cut interest rates by a quarter percentage point on September 17, 2025, putting the overnight funds rate between 4.00% and 4.25%. According to CNBC, officials in their "dot plot" of individual expectations pointed to two more cuts before year end. The decision came amid concerns over the labor market, with unemployment at 4.3% in August and job creation stagnant this year. A Bureau of Labor Statistics update showed the economy created nearly a million fewer jobs than initially reported in the 12-month period prior to March 2025.

Markets assigned better than 70% probability of cuts in both October and December meetings. The Fed's decision to ease policy followed weakening labor market data while inflation remained somewhat elevated. Analysts noted the shutdown could complicate monetary policy decisions by potentially delaying key economic data releases. The Federal Reserve next meets October 29 to make its rate decision.

Further Reading

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