Morning Wrap: ASX 200 to rise, S&P 500 and Dow at all-time highs despite government shutdown

ASX 200 futures are up 44pts (+0.49%) as of 8:30 am AEST.

In a nutshell:

• Major US benchmarks broadly higher despite opening relatively flat/slightly lower

• S&P 500 and Dow both up for a fourth straight session and closed at fresh all-time highs

• US government shutdown begins after Senate rejected stopgap funding legislation

• A relatively quiet session outside of the shutdown, with softer-than-expected ADP private payroll data buoying Fed rate cut expectations

Let’s dive in.

Overnight Summary

Thu 02 Oct 25, 8:22am (AEST)

US Sectors

Thu 02 Oct 25, 8:22am (AEST)

S&P 500 SESSION CHART

S&P 500 opened lower but recovered early losses to close near best levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks higher after a wobbly start, closed near best levels

• S&P 500 and Dow up for a fourth straight session, both closed at fresh all-time highs

• Relatively quiet session outside of the US government shutdown, soft economic data including ADP private payrolls and JOLTs buoy dovish Fed expectations 

• Historical data shows Q4 is the best quarter for stocks (AX)

• Traders lift bullish Treasury options positions, betting that economic drag from shutdown will favour Fed rate cuts (BBG)

• US Dollar Index has drifted lower both during the past three most recent government shutdowns (BBG)

STOCKS

• Nike beats Q1 on top and bottom line, with sales down 0.6% vs. company guidance of mid-single digits and consensus for a 6% decline, warns of challenging sales outlook during holding season, costlier tariff impact (CNBC)

• Intel in early talks to add AMD as a customer (CNBC)

• Meta approves showing Facebook and Instagram ads based on chats with AI (CNBC)

• GM reported a 7.7% increase in its US auto sales during Q3 amid strong demand for EVs and SUVs (RT)

• BYD sales fall for first time in 19 months, down 5.5% year-on-year to 396,000 (FT)

• Pfizer avoids Trump’s pharma tariffs by agreeing to cut drug prices up to 85% and sell directly to Americans (BBG)

• Nvidia faces challenges from rising China competition amid geopolitical tensions, raising questions about its market leadership (FT)

• Berkshire Hathaway closing in on $10bn deal to acquire Occidental’s petrochemical business (FT)

• US DoE to acquire 5% stake in Lithium Americas and separate stake in company’s lithium mine JV with GM (BBG)

TARIFFS

• USTR Greer says 55% China tariffs “good status quo”, flags trade deals with SE Asia (BBG)

• South Korea agrees to provide US monthly data on FX interventions, commit to avoiding FX manipulation as part of accord (BBG)

• Taiwan rejects White House demand to produce 50% of American chip needs in US (RT)

• EU to restrict steel imports, proposing to cut foreign quotas by nearly half and increase tariffs to address overcapacity (BBG)

CENTRAL BANKS

• Shutdown pressures divided Fed, with some policymakers advocating for urgency on rate cuts while others urge caution (NYT)

• Dallas Fed President Logan warns limited room for further rate cuts amid persistent inflation and resilient demand (BBG)

• Reserve Bank of India held rates steady, kept its neutral stance, favours wait-and-see approach (BBG)

US GOVERNMENT SHUTDOWN

• US government shutdown begins after Senate rejects stopgap funding legislation (AX)

• SEC to stop processing IPO paperwork, threatening to stall growing momentum in those offerings (RT)

• Shutdown may actually enable Trump administration to more swiftly carry out certain agendas (YF)

• Trump says lot of good could come from shutdown, threatens layoffs and defunding of programs he doesn’t like (NYT)

• Longer government shutdowns significantly impact economic growth, leading to reduced consumer spending, disrupted services (WSJ)

ECONOMY

• US September ISM manufacturing PMI was 49.1 vs. 49.4 consensus, up from 48.7 in the prior month and at the highest since February 2025 (BBG)

• US private payrolls fall 32,000 in September vs. consensus for a 50,000 increase, marking the weakest reading since March 2023 (BBG)

• Eurozone manufacturing conditions deteriorate in September, driven by reduced new orders and job cuts (RT)

• Euro-area inflation rises to 2.2% in September, supporting the ECB’s decision to maintain steady interest rates (BBG)

• South Korea export growth smashes expectations amid surge in semiconductor shipments (RT)

Industry ETFs

Thu 02 Oct 25, 8:22am (AEST)

ASX TODAY

• A very quiet morning in terms of announcements, newsflow and catalysts, moves for overnight ETFs also very US-centric as opposed to broader moves that may impact local sectors

• Bain Capital thought to be keeping an eye on Healius,though no bid is imminent (The Aus)

• Glencore among potential suitors considering a bid for BHP’s nickel assets in Western Australia (BHP) 

WHAT TO WATCH TODAY

• US shutdown: Median shutdown was four days long since 1976, according to Carson Investment Research, with a median return of 0.1%. Though the S&P 500 was higher after 12 months 86% of the time, up a median 12.3%.

• Bravura Solutions: Rallied 18.1% on Wednesday after upgrading its FY26 earnings, will be interesting to see some follow through and broker upgrades.

BROKER MOVES

• Dyno Nobel retained Neutral; target up to $3.50 from $2.55 (CITI)

• Qoria initiated Buy with $0.90 target (BP)

• Ramsay Healthcare downgraded to Underweight from Equal-weight; target cut to $31.30 from $36.70 (MS)

Key Events

Stocks trading ex-dividend: 

• Thu 2 Oct: ARB Corporation (ARB) – $0.35, Cosol (COS) – $0.012, Imperial Pacific (IPC) – $0.07, London City Equities (LCE) – $0.025, Wam Strategic Value (WAR) – $0.03

• Fri 3 Oct: Steamships Trading Company (SST) – $0.128

Other ASX corporate actions today: 

• Dividends paid: Downer EDI (DOW), Centrepoint Alliance (CAF), Breville Group (BRG), Seek (SEK), CTI Logistics (CLX), Treasury Wine Estates (TWE), Kina Securities (KSL), Propel Funeral Partners (PFP), Servcorp (SRV), Supply Network (SNL), MAAS Group Holdings (MGH), Peter Warren Automotive Holdings (PWR) 

• Earnings: None

• IPOs: None

• AGMs: None

Economic calendar (AEST):

• 11:30 am: Australia Balance of Trade (Aug)

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