Markets Hold Steady through Policy Shifts and Government Shutdown

The week in the United States was marked by a complex interplay between political tensions, signs of an economic slowdown, and surprising stability in the financial markets. The government shutdown, which began on October 1 after the Senate failed to pass a temporary spending measure, left numerous non-essential services, from federal agencies to infrastructure projects, without funding. This paralysis threatens to disrupt the publication of key statistics such as the employment report. The White House was accused of making the shutdown "as painful as possible" for Democratic areas, while President Trump seeks to capitalize on the situation to advance his fiscal and trade agenda.

On the economic front, the data released reinforced the perception of an economy losing momentum. The ADP report showed a drop of 32,000 private jobs in September, the worst figure since 2020. Although part of the decline is attributed to methodological adjustments, it reflects weakness in labor-intensive sectors. The real estate market also showed signs of cooling: the Fannie Mae and Freddie Mac housing index fell for the fourth consecutive month, and the Case-Shiller index recorded an annual increase of just 1.8%, the lowest in two years.

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