U.S. equities extended gains on Thursday, demonstrating continued resilience despite the ongoing federal government shutdown. With the shutdown delaying the release of key labor market data, investors turned to private-sector indicators to gauge underlying employment trends.

ADP reported a net loss of 32,000 jobs in September, suggesting incremental softening in labor conditions. Vice President JD Vance warned that should the shutdown continue, it could necessitate government layoffs, further reinforcing expectations of a near-term Fed rate cut, potentially as early as the October meeting.

Factoring in expectations of another rate cut, the S&P 500 advanced 0.06%, while the Dow Jones Industrial Average and Nasdaq Composite added 0.17% and 0.37%, respectively.

Valuation concerns remain elevated, with the S&P 500 trading at a 27.6x PE, above the five-year average range of 19.5x–25.0x. Nonetheless, markets appear willing to look past stretched multiples amid rising conviction that monetary conditions will loosen further in the next fed meeting.

Meanwhile, the 10-year U.S. Treasury yield declined 37 bps to 4.09%, reflecting safe-haven demand and easing growth expectations. Meanwhile, the 2-year yield inched 17 bps higher to 3.54%, steepening the front end as investors priced in near-term policy volatility.

Commodities were mixed. Gold (-0.23%) and silver (-0.78%) softened amid a marginally firmer dollar, while copper (+1.24%) advanced on improving industrial demand sentiment. WTI crude (-1.81%) extended losses on renewed demand-side concerns and elevated inventory levels.