Watch out: Soaring stocks could tip markets over

Monday, September 29, 2025

With 1 1/2 trading days left, the third quarter has given long investors all they could want and more, but there's a difficult finale in the making.

With a backdrop of Fed interest-rate-cut speculation, record highs in stocks and steeper valuations, investors now need to juggle the rising odds of that the government will shut down. Just after midnight on Oct. 1, a shutdown could go into effect, casting a broad shadow on the U.S. markets. It could temporarily soften excitement in the markets heading into the historically strongest quarter of the year, even disturbing the start of a new earnings season.

Shutdowns have not generally led to dramatic corrections or crashes for the markets or the economy, but Barclays warns that it could delay the release of key economic data and result in the furloughing of thousands of government employees, which might make the Fed even more amenable to easing rate policy in the October meeting.

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What can prevent a shutdown in the 11th hour? President Donald Trump is set to meet with Democratic Party leaders this afternoon. Hopes are not particularly high, though.

Equities are even starting to reflect skepticism for a deal. The Dow (-0.08%) has seen declines since early trade. The Russell is flat. The Nasdaq (+0.58%) and S&P 500 (+0.27%) remain in the green.

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-- Noah Weidner, Markets Reporter

Watch out: Soaring stocks could tip markets over

The major averages are sitting just below all-time highs as September closes.

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