Wall Street’s three major indices closed in positive territory after a choppy trade session yesterday, as investors braced for a US government shutdown. The S&P 500 gained 0.4 per cent to end at 6 thousand 688, the tech-heavy Nasdaq Composite Index closed 0.3 per cent up to close at 22 thousand 660. The Dow Jones Industrial Average added almost 0.2 per cent to end at 46 thousand 398.
What it means.
The US federal government must now furlough hundreds of thousands of employees, while essential services remain in place.
By law, agencies must suspend “non-excepted” staff, while “excepted” employees protecting life and property stay on the job without pay until the shutdown ends. The White House budget office sent instructions Tuesday evening to initiate shutdown procedures.
The Congressional Budget Office estimates about 750,000 workers could be furloughed daily, with a total cost of $400 million (about €340 million) in compensation each day.
Ahead of the shutdown, the National Transportation Safety Board, for example, said it would temporarily suspend a quarter of its staff.
Work considered essential continues, including police and intelligence investigations, air traffic control, airport security, and military duties. Programs funded through mandatory spending also carry on, meaning social security payments, Medicare services, and veterans’ health care are not interrupted.
Some other government functions, such as NASA’s space missions and border protection, will also continue.
The White House itself has suggested that a shutdown could lead to large-scale layoffs across the government.
“We’d be laying off a lot of people that are going to be very affected. And they’re Democrats, they’re going to be Democrats,” Trump said late on Tuesday before the shutdown came into effect.
The move would add to the pain of government workers after large-scale firings orchestrated by billionaire Elon Musk’s Department of Government Efficiency, or DOGE, earlier this year.