The week of September 29 to October 3, 2025, presented a fascinating paradox in financial markets: extraordinary strength in equities and alternative assets amid significant political uncertainty and concerning economic data. Despite the first US government shutdown in seven years, major indices reached historic peaks, with investors seemingly undaunted by the political gridlock in Washington. This resilience was tested by troubling employment data that revealed the first private-sector job losses in over four years, yet markets continued their upward trajectory, buoyed by expectations of aggressive Federal Reserve interest rate cuts. The week highlighted the complex interplay between geopolitical uncertainty, monetary policy expectations, and asset price dynamics in an environment where traditional risk-off signals appeared to have limited impact on investor sentiment.
Market Indices: The S&P 500 (SPY) demonstrated remarkable resilience, advancing 0.3% to close at a record 6,711.20 on Wednesday, marking its 29th record close of the year. The index crossed the psychologically important 6,700 level for the first time, as investors shrugged off government shutdown concerns. The Nasdaq Composite (QQQ) gained 0.4% to reach 22,755.16, setting a new record high despite the absence of Friday's jobs report due to the federal shutdown. The Dow Jones Industrial Average (DIA) rose modestly by 0.1% to 46,441.10, achieving its second consecutive record close.
Government Shutdown Impact: The markets displayed unexpected resilience to the shutdown, with analysts noting that historically, such events have had minimal long-term economic impact. According to Capital Economics, previous shutdowns have typically lasted an average of eight days and resulted in average S&P 500 gains of 12% and 29% in the one- and three-month periods following their conclusion.
Tesla (TSLA): The electric vehicle giant delivered a standout performance with record Q3 2025 deliveries of 497,099 vehicles, surpassing Wall Street's consensus estimate of 439,600 units by over 13%. Model 3 and Model Y deliveries reached 481,166 units, representing a 9.4% year-over-year increase. The company also deployed 12.5 GWh of energy storage products, setting a new record in its fast-growing energy business. Tesla's success was partly attributed to accelerated US consumer purchases ahead of the federal EV tax credit expiration on September 30.
Netflix (NFLX): Shares declined 2.3% following controversial social media posts by Elon Musk, who urged his 226 million X platform followers to "cancel Netflix" over content concerns. The criticism centered on the animated series "Dead End: Paranormal Park," which features transgender characters. Despite the controversy, experts suggest the backlash may have limited impact given Netflix's 301.63 million subscriber base and $490 billion market capitalization.
Fermi (FRMI): The energy-focused REIT co-founded by former Energy Secretary Rick Perry made a spectacular market debut, surging 55% on its first trading day to close at $32.53, well above its $21 IPO price. The company raised $682.5 million in its upsized offering, achieving a market valuation of approximately $16.6 billion. Fermi's ambitious "Project Matador" aims to develop the world's largest energy and data complex, targeting 11 GW of power capacity using nuclear, natural gas, and solar sources.
CoreWeave (CRWV): The AI infrastructure company's stock jumped 12% following the announcement of a massive $14.2 billion cloud computing deal with Meta (META), extending through December 2031 with options to expand through 2032. The agreement highlights the extraordinary demand for AI infrastructure and positions CoreWeave to diversify beyond its heavy dependence on Microsoft, which represented approximately 70% of its revenue in the last quarter.
US Dollar: The Dollar Index (DXY) faced significant headwinds throughout the week, falling to near one-week lows around 97.61 as government shutdown concerns and expectations of Federal Reserve rate cuts weighed on the greenback. The dollar's weakness was exacerbated by disappointing ADP employment data showing job losses rather than gains.
USD/JPY: The pair struggled to maintain the 148.00 level, with the dollar facing pressure from both hawkish Bank of Japan expectations and dovish Federal Reserve positioning. Japanese policymakers showed growing support for faster normalization, with markets pricing in a 25-basis-point hike as early as October, while Fed rate cut probabilities reached 98% for the upcoming October meeting.
EUR/USD: The euro steadied near 1.1750 as traders digested the weak US ADP employment data and government shutdown implications. The pair extended gains for a fourth straight day, rising approximately 0.18% as dollar weakness provided support for the single currency.
Gold (GLD): The precious metal achieved its most spectacular performance of the year, smashing through $3,800 per ounce to reach new all-time highs. Spot gold surged 1.8% to $3,827.19, driven by safe-haven demand amid government shutdown concerns and expectations of Federal Reserve rate cuts. The metal has gained an extraordinary 47% year-to-date, cementing its status as 2025's returns king. UBS analysts expect gold prices may rise further to $3,900 per ounce in the coming months.
Silver and Other Precious Metals: Silver prices climbed 2.1% to $46.95 per ounce, marking the highest level in 14 years. Platinum gained 1.7% to $1,595.35, reaching 12-year highs, while palladium increased 0.7% to $1,279.46 per ounce.
Bitcoin (BTC.X): The leading cryptocurrency broke above $120,000 as JPMorgan Chase raised its year-end price target to $165,000, citing Bitcoin's undervaluation compared to gold on a volatility-adjusted basis. The bank noted that the BTC-to-gold volatility ratio has slipped below 2.0, suggesting Bitcoin would need to rise about 42% to reach parity with private gold investment levels. Citigroup provided even more bullish projections, with a base case target of $181,000 and an optimistic scenario of $231,000 within 12 months.
Employment Data: The most significant economic development was ADP's report showing an unexpected loss of 32,000 private-sector jobs in September, marking a sharp reversal from expectations of 45,000 job gains. This represented the first private-sector job decline since 2020 and was particularly concerning given the revision of August's figures from a gain of 54,000 to a loss of 3,000 jobs. The weakness was most pronounced among smaller businesses, with firms employing 20-49 workers shedding 21,000 jobs and those with fewer than 19 employees losing 19,000 positions.
Federal Reserve Policy: The combination of weak employment data and government shutdown concerns has pushed Federal Reserve rate cut expectations to near certainty, with markets pricing in a 99% probability of a 25-basis-point cut at the October meeting. The delayed release of the official September jobs report due to the government shutdown has increased reliance on private sector data, potentially making the Fed's policy decision more challenging.
Government Shutdown: The first federal shutdown in seven years began September 30 after Congress failed to reach agreement on a temporary spending bill. Democrats demanded inclusion of enhanced healthcare tax credits, while Republicans pushed for a clean stop-gap funding measure through November. The shutdown has halted operations at numerous federal agencies, including the Bureau of Labor Statistics, delaying the release of crucial economic data.
As markets navigate the final quarter of 2025, several key factors will shape investor sentiment and asset prices:
Monetary Policy: The Federal Reserve's October meeting has become even more critical given the lack of official employment data. With private sector job losses and government shutdown concerns, the case for aggressive easing has strengthened considerably.
Government Shutdown Duration: Historical precedent suggests most shutdowns resolve quickly, but the current political dynamics and Democratic demands for healthcare provisions could extend the impasse beyond typical timeframes.
Economic Data Reliability: The absence of official government statistics will force markets to rely more heavily on private sector indicators, potentially increasing volatility as different data sources provide conflicting signals about economic health.
Seasonal Factors: October has historically been a strong month for risk assets, earning the nickname "Uptober" among cryptocurrency traders. Bitcoin's historical pattern shows average gains of 21.8% in October when September closes positive, as occurred this year.
The week's events have created a complex backdrop for investors, with record-high asset prices coinciding with deteriorating economic fundamentals and political uncertainty. This unusual combination suggests continued volatility as markets attempt to reconcile optimistic valuations with concerning underlying trends in employment and government function.