US Government Shutdown Dents Wall Street, Boosts Gold
The US government officially entered a shutdown on Wednesday, leading to a mixed day on Wall Street. Stocks dipped lower, while safe haven assets like gold and silver surged.
The Dow Jones Industrial Average fell 40 points, or 0.1%, while the S&P 500 slipped 0.4%, and the Nasdaq Composite dropped 0.6%. Investors seemed cautious due to the shutdown, with some expressing concerns about potential market volatility and delays in government economic reports.
Gold futures hit a record high of $3,900 a troy ounce, up almost 48% this year, as investors sought safe haven assets. Silver prices also surged, rising 1.6% to $47 a troy ounce, up 62% this year.
Bonds rallied on Wednesday, with investors snapping up Treasuries. This led to falls in two-year, 10-year, and 30-year Treasury yields.
Meanwhile, the private sector lost 32,000 jobs in September, according to ADP data.
Historically, government shutdowns have had a limited impact on the stock market. Since 1976, there have been 20 shutdowns, with an average length of eight days each. The S&P 500 gained an average of 1.2% and 2.9% in the one- and three-month periods after each ended. However, this shutdown is set to put many federal employees out of work indefinitely and may impact the release of key economic data.
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