The Nasdaq Composite added 0.4%, while the Dow Jones Industrial Average gained 0.2%

U.S. stocks rose and gold traded near record highs on Thursday as investors took in their stride the potential ramifications of a government shutdown, while a weak private labour market report bolstered bets for central bank rate cuts.

Investors have been largely sanguine about the shutdown’s impact on the country’s economy, helped by data of past shutdowns that showed limited fallouts. Morgan Stanley, for example, said share prices have risen an average 4.4% while real U.S. economic growth has expanded 2.2% during shutdowns in the past.

Instead, investors are focused on how much the country’s central bank might lower interest rates this year, and whether the U.S. stock market is due for a short-term pullback in the near future.

Nicholas Colas and Jessica Rabe, co-founders of DataTrek Research, said sector sub-indices for the S&P 500 index are showing a marked correlation with downside risks.

Every other time they have done so since 2023, the S&P has declined by 5-18% in the following weeks, Colas and Rabe said. This is not an outright ‘sell’ signal, but history says to be selective here.

The S&P 500, which has risen 14% so far this year, was flat after briefly hitting a record high of 6,731.94 points. The Nasdaq Composite added 0.4% after also hitting an all-time high of 22,900.60 points, while the Dow Jones Industrial Average gained 0.2%.

A protracted U.S. government shutdown could mean that the release of official data on employment and inflation is delayed or disrupted, clouding the picture on the health of the country’s economy and the path for interest rates.

A monthly payrolls report seems unlikely now to be released on Friday, putting an ADP employment report that showed the economy unexpectedly shed jobs in September into sharper focus. Traders are now pricing in two quarter-point bank rate cuts by the end of the year as almost a done deal.