Morning in New York: the market on the verge of shutdown

Daily review and forecast of events on the U.S. stock market from Mikhail Denislamov, Deputy Director of Freedom Capital Markets Research.

The key uncertainty of today's session remains the risk of a U.S. government shutdown: the parties failed to make significant progress following negotiations on the evening of September 29. Such disagreements make the likelihood of a shutdown of federal agencies very high, and the funding deadline is today, September 30. This is not only a political risk, but also an informational risk: in the event of a shutdown, the release of key macroeconomic reports, including Friday's employment report, could be delayed. In such a scenario, secondary data, such as the private report from ADP, would take on increased importance for assessing the state of the economy. Deep divisions remain between the parties, and the Polymarket platform estimates the probability of a shutdown on October 1 to be above 75%.

Investors will focus on the JOLTS report for August and the Conference Board Consumer Confidence Index for September. We expect JOLTS job openings to hit a yearly low in the range of 7100-7200k vs. 7181k a month earlier, signaling some weakness in the labor market. Consumer Confidence consensus stands at 96.0 vs. previous 97.4, indicating a gradual decline in household optimism from the average of the past four months.

Lamb Weston (LW) and Paychex (PAYX) will report before the market opens, with Nike (NKE) reporting results after the close.

Futures on US indices show about zero dynamics. We assess the balance of risks as neutral with moderate volatility. We focus on S&P 500 fluctuations in the range of 6600-6700 points (from -0.9% to +0.6% of the previous session's closing level).

- Progress Software (PRGS) shares were up over 5% after the report, with adjusted EPS coming in at $1.50 versus consensus of $1.30, and revenue reaching $249.8 million (+40% YoY) against expectations of $240.11 million. Particularly impressive was the 47% YoY increase in annual recurring revenue to $849 million, which allowed the company to raise its full-year revenue guidance to $975-981 million.

- Despite the strong performance, shares of Jefferies (JEF) are down 1% after the report. Management emphasizes stable deal flow and positive expectations for 2026 amid anticipated rate cuts and revitalization of corporate clients. The company beat analysts' estimates on a number of metrics - net income rose to $224 million versus $167 million a year earlier, while investment banking revenue rose 20% on record fees ($656 million) and a rebound in the M&A market.

- Uranium Energy Fuels (UUUU) shares are down 6.7% after announcing a major offering of $550 million in convertible senior notes due 2031, raising investor concerns about potential capital dilution.

- Shares of Vail Resorts (MTN) are down about 2% following the release of its financials, with Q4 EPS of -$5.08 (worse than the forecast of -$4.77). Despite the weak quarterly performance, the company reported a 2% increase in annualized EBITDA for the resorts to $844 million. The outlook for 2026 also remains moderately positive, with net income expected in the range of $201-276 million and further investment in infrastructure.

September 29 trading on the U.S. stock markets ended with growth: the S&P 500 rose by 0.26%, the Nasdaq 100 rose by 0.44%, the Dow Jones added 0.15%, and the Russell 2000 rose by a symbolic 0.04%. The Magnificent Seven saw mixed performance, with Nvidia (NVDA: +2.05%) standing out as a notable gainer. The technology sector (XLK: +0.53%) was the leader, while the energy sector (XLE: -1.84%) was the outsider amid a sharp drop in oil prices after reports of a possible OPEC+ production increase.

The key event of the day was expectations of a possible shutdown of the US government. Additionally, the topic of trade relations with China became more topical: President Trump again spoke in favor of imposing "substantial" tariffs on furniture, and China's Ministry of Commerce condemned the strengthening of U.S. export controls. Additional attention was drawn to the speeches of the Fed representatives: President of FRB New York Williams noted the reduction of some inflation risks and the validity of the September rate cut, while the presidents of FRB St. Louis and Cleveland called for caution in further policy easing due to the remaining inflation risks.

The day's macroeconomic statistics were mixed: August pending home sales significantly beat expectations - rising 4.0% m/m vs. the forecast of 0.4% - the fastest growth since Ma and indicating resilient housing demand. Meanwhile, the Dallas Manufacturing Index for September moved into negative territory to -8.7 versus expectations of -1.0, which despite weakness in new orders and jobs, did not meaningfully weigh on overall market sentiment.

- There was a surprise leadership change at rail operator CSX (CSX: +5.4%) as CEO Joe Hinrichs left the company and was replaced by former Linde head Steve Aingeel amid pressure from industry consolidation activists.

- The failure of key Phase 3 clinical trials for Sonelokimab led to the collapse of biotech MoonLake Immunotherapeutics (MLTX: -89.9%) when the VELA-2 study failed to reach its goal of treating suppurative hidradenitis.

- Instacart (CART: -10.4%) was pressured by news of a new partnership between Uber (UBER: +1.1%) and Aldi for grocery delivery, increasing competition in this market.

- Shares of furniture retailer Williams-Sonoma (WSM: -4.7%) came under pressure following President Trump's announcement that he would impose "significant tariffs" on any country that does not manufacture furniture in the U.S..

This article was AI-translated and verified by a human editor