S&P 500 reports best September in 15 years as investors shrug off shutdown worries

Benchmark indices on Wall Street ended the session higher on Tuesday in what was another choppy trading session to round off a seasonally weak September and the quarter, with gains.

The Dow Jones recovered nearly 300 points from the lows to post a record closing high, while the S&P 500 and Nasdaq, supported by Nvidia, also ended with gains. Nvidia's market capitalisation has now crossed $4.5 trillion.

With this, the S&P 500 reported its best September in 15 years, registering gains of 3%, where the average fall has been 4.2% over the last five years. The Dow Jones gained 2%, while the Nasdaq outperformed with a 5.6% jump.

For the quarter, the Dow saw its fifth straight quarterly advance with a 5% gain, while the S&P 500 and Nasdaq gained 8% and 11% respectively, supported by the tech stocks.

Investors shrugged off worries of a government shutdown, even as both Democrats and Republicans blamed each other for the current situation. According to the non-partisan Congressional Budget Office (CBO) nearly 7,50,000 Federal workers could be furloughed if the shutdown takes effect and the daily cost of their compensation, could be close to $400 million.

A shutdown would also mean that Friday's non-farm payrolls data, released by the Bureau of Labor Statistics would be delayed. Weakness in the labor market has been the Fed's biggest policy trigger going into the final two meetings of 2025 and a potential delay would mean Wednesday's private ADP data will take precedence.

However, according to data from Raymond James Research and Factset, historical shutdowns have not lasted beyond two to three weeks and have not moved the market much, with the average daily S&P 500 return ranging from 0 to 0.5% during this period.

Macro data ahead of the jobs report and shutdown remained tepid, with the hiring rate in August declining to the lowest in 12 months, while consumer confidence slumped to the lowest in five months.

Oil prices fell further on reports that OPEC+ is looking to hike output by 5,00,000 barrels per day per month over the next three months. Gold remains near record high.

In case there is no government shutdown, the manufacturing PMI data will also be reported today, along with auto sales for the month gone by.