US equity indexes were mixed in midday trading on Wednesday as healthcare helped offset losses, while a failure by lawmakers to extend fiscal-year 2025 funding by Tuesday midnight sent government bond yields lower.
The Nasdaq Composite rose 0.3% to 22,737.2, with the S&P 500 up 0.2% to 6,703.5 and the Dow Jones Industrial Average little changed at 46,413.1. All three gauges were down earlier in the session.
Healthcare led gainers for a second day, boosted by pharmaceuticals.
Drugmakers extended gains a day after the White House unveiled a deal with Pfizer (PFE) under the Trump administration's "most-favored-nation" drug pricing policy, with Pfizer committing to voluntary price reductions and a $70 billion US investment plan. Amgen (AMGN), Merck & Co. (MRK), Regeneron (REGN), and Biogen (BIIB) were among the top gainers intraday in the S&P 500, the Nasdaq, and the Dow.
Federal government shutdown impacts include delayed economic data releases critical for the Federal Reserve's upcoming rate decision, raising uncertainty about labor market conditions. The last shutdown, straddling 2018-2019, lasted 35 days and reduced spending by $3 billion in Q4 of 2018 and another $8 billion in Q1 of 2019, Lindsey Piegza, chief economist at Stifel, said in a note late Tuesday.
"The economic costs of government shutdowns are normally minimal unless they last for several weeks," Oxford Economics Chief US Economist Ryan Sweet said in a Tuesday note. However, the shutdown could leave the Federal Reserve uncertain about the labor market, "fueling support for an October cut," according to Sweet.
Meanwhile, in economic news, ADP's monthly measure of private payrolls showed a decline of 32,000 in September, compared with expectations compiled by Bloomberg for a gain of 51,000. The retreat followed a downwardly revised 3,000 drop in August.
The S&P Global US manufacturing index for September was unrevised from the flash reading of 52.0, as expected in a survey compiled by Bloomberg, but below the 53.0 reported in August, indicating slower expansion.
Treasury yields retreated intraday, with the 10-year down 2.9 basis points to 4.12% and the two-year rate 4.5 basis points lower at 3.56%.
West Texas Intermediate crude oil futures fell 0.3% to $62.17 a barrel.
In company news, BlackRock-owned (BLK) Global Infrastructure Partners is close to acquiring utility group AES (AES) in a roughly $38 billion deal, the Financial Times reported, citing people briefed on the matter. AES shares surged 15% intraday, the top gainer on the S&P 500.