US stock markets experienced a modest uptick on Tuesday, reflecting a mixed sentiment among investors regarding the implications of President Trump’s aggressive tariff policy and the impending possibility of a government shutdown—the first in seven years. The Dow Jones Industrial Average rose by 0.2%, closing at a new record high, while the S&P 500 and the tech-heavy Nasdaq Composite climbed 0.4% and 0.3%, respectively. Notably, both the Nasdaq and S&P 500 marked their most successful third quarter since 2020, achieving their best September performance since 2010.
Despite the positive closing figures, market participants remained anxious over the impending government shutdown, especially after Trump and Republican leaders failed to reach an agreement with Democrats during a meeting in the Oval Office on Monday. Vice President JD Vance indicated a strong belief that a shutdown is imminent. According to Polymarket, the likelihood of shutdown is pegged at around 93%. The deadline for Congress to reach a budget agreement looms, with only hours left before funding ceases at 12:01 a.m. ET on Wednesday.
The fear among investors is that such a shutdown would suspend critical economic data releases. The Bureau of Labor Statistics has communicated that it would “completely cease operations,” which could delay the release of significant reports, including Friday’s highly anticipated nonfarm payrolls data. On Tuesday, the final Job Openings and Labor Turnover Survey indicated that job openings had risen more than anticipated, although hires slowed and layoffs decreased—a phenomenon referred to as a “low-hire, low-fire” market.
Adding to investor anxiety, the Conference Board’s consumer confidence measure fell to its lowest level since April, reflecting concerns surrounding Trump’s tariff initiatives, particularly those affecting the job market. The index dropped significantly as consumers reported a dim outlook on employment.
In a controversial move, Trump announced new tariffs on various commodities, including lumber, timber, and certain furniture types, following recent threats to levy taxes on foreign-made films and a 100% duty on branded pharmaceuticals. The combination of these tariffs is raising concerns about potential adverse effects on the global economy, particularly in light of ongoing economic struggles in China and Japan.
Amidst these developments, several companies reported noteworthy performance. Robinhood saw its stock soar by 3%, reaching an impressive 280% increase year-to-date, fueled by excitement over new trading features. The stock of Nvidia also climbed by over 2%, hitting record prices as analysts anticipate a significant rise in AI-related capital expenditures.
In the commodities market, gold prices edged higher, marking a substantial 45% gain for the year and achieving its best third quarter since 1986. The price of silver also surged, reflecting growing investor interest in safe-haven assets as the likelihood of a government shutdown looms.
In corporate news, Pfizer’s stock rose following the announcement of a historic agreement with the Trump administration aimed at lowering drug costs for Americans. This initiative is set to empower American consumers to access discounted medications through a newly launched direct-to-consumer website.
In technology, Alphabet is on track for its best quarterly performance in two decades, despite a 1% decline in its stock on Tuesday. The company’s shares are projected to close the third quarter with a gain of 35%, though this comes after settling a lawsuit with President Trump related to the suspension of his YouTube account following the January 6 Capitol riots.
Overall, while U.S. stocks showed resilience in the face of economic uncertainty, the potential fallout from a government shutdown and the impact of expanding tariffs remain major concerns for investors as they navigate this turbulent economic landscape.
