Stocks in the U.S. fell after trading opened on the first day of the government shutdown

Leading U.S. stock indexes fell after the opening of trading on October 1 - the first day of the U.S. government shutdown. The shutdown of the administration did not come as a surprise to the market, but now it is wondering how long it will last. A Freedom analyst saw the situation as a chance for long-term investors.

- The main U.S. stock index S&P 500 after the opening of trading on October 1 declined by about 0.3%. At the same time, the trades on September 30, it ended in plus by 0.4%.

- Dow Jones blue chips index lost about 0.11%. A day earlier, it rose by almost 0.2%.

- The Nasdaq Composite index of technology stocks was down 0.4%, though it was up 0.3% at the end of Tuesday's trading.

- The Russell 2000 index of small-capitalization companies was losing about 0.2%.

As of midnight, October 1, U.S. Eastern Time, the work of most U.S. federal agencies was suspended due to delays in budget reconciliation. Exceptions were made only for "vital" agencies. The White House Office of Management and Budget (OMB) sent out a memorandum instructing the agencies to begin implementing their shutdown plans. Its director, Russell Vaught, noted that it is unclear how long the shutdown will last.

The current government shutdown will affect everything from air travel to the schedule for publishing macrostatistics data, Reuters writes. Since 1981, there have been 14 shutdowns in the United States, and the longest was the crisis of 2018, when the government did not work for five weeks because of disputes over the funding of the wall on the border with Mexico. At the same time, then the shutdown was partial: Congress approved funding for certain structures, noted CNN.

"Although historically such situations have not led to significant corrections, the current episode is perceived by the market as relatively more risky. This is due to the possibility of a long pause and delay in the release of key macro data, primarily the September employment report," said Mikhail Denislamov, deputy director of Freedom Capital Markets Research. In his opinion, the shutdown will provoke "a slight spike in volatility," which, however, will open the door for "building up long positions."

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