Most major indices are sitting at the lows of the session, as mounting concerns over a potential government shutdown is keeping investors on edge. In addition, small cap indexes are trading lower, despite the recent support that heightened rate cut hopes.

Markets are bracing for a government shutdown if an agreement is not met tonight. President Trump has indicated this could be an opportunity to reduce government employment and spending on certain programs.

Polymarket odds now suggest an 86% of a government shutdown.

Four sectors are moving higher with Health Care (XLV) in the lead and driven by gains from Pfizer Inc. (PFE). There are reports indicating that Trump is planning to announce a direct-to-consumer website to buy American drugs called TrumpRx. In addition, Pfizer has agreed to participate by offering some of its medicines on the platform at significant discounts. Meanwhile, Energy (XLE) is worst performing sector, driven by a decline in oil prices, which continue to be under pressure ahead of the OPEC+ meeting on October 5th.

Consumer Discretionary is also lagging, driven by declines in gambling and travel related stocks.

Economic Data

This morning’s job openings report showed a 19,000 increase to 7.227M in August from 7.208M in July and above estimates of 7.2M.

The Dallas Fed General Business Activity Index fell 12 points to -5.6 in September from 6.8 in August.

Notable changes:

• The revenue Index fell 11 points to -2.4
• The Employment Index declined 3.6 points to -2.4
• The Outlook Index worsened by 7 points to -2.6
• The Outlook Uncertainty Index rose 11 points to 22.5
• The Wages and Benefits Index edged lower by 4 points to 11.9

The Conference Board Consumer Confidence Index declined to 94.2 in September from 97.8, missing consensus of 96. A sharp decline in consumers’ views of the current economic situation weighed on confidence.

The Present Situation Index declined -7 pts to 125.4, reflecting weaker views on business conditions and labor markets.