Powell Comments and Looming Federal Government Shutdown Dominated Trading Sentiment

Barry Adams
24 Sep, 2025
New York City

Stock market indexes in New York struggled to advance for the second consecutive day amid valuation worries and a looming federal government shutdown. 

The S&P 500 index decreased 0.4%, and the tech-focused Nasdaq Composite declined 0.3% as investors awaited the release of PCE price index data on Friday.

The federal government could face its first shutdown in five years at the end of September, as the funding runs out, as lawmakers struggle to strike a compromise on healthcare spending.

Benchmark indexes halted a three-day rally following cautious comments from the Fed Chair Jerome Powell. 

Fed policymakers are struggling to balance rising risks of inflation and weakening labor market conditions while keeping the economic growth intact. 

Moreover, the fast-evolving economic backdrop impacted by the surge in import taxes, imposed by the Trump administration, is forcing the policymakers to exercise greater caution. 

"Tariff increases will likely take some time to work their way through supply chains. 

As a result, this one-time increase in the price level will likely be spread over several quarters and show up as somewhat higher inflation during that period," added Powell while delivering his comments at a gathering in Warwick, Rhode Island. 

During a question time at a gathering in Rhode Island, the central bank's chief confirmed that policymakers review market prices. 

“We do look at overall financial conditions, and we ask ourselves whether our policies are affecting financial conditions in a way that is what we’re trying to achieve,” Powell said. 

“But you’re right; by many measures, for example, equity prices are fairly highly valued,” added Fed Chair Powell. 

The S&P 500 index decreased 0.6%, and the Nasdaq Composite fell 1% after Powell's comments, and investors dialed down the expectations for a rate cut at the end of the next policy meeting on October 29.

 

U.S. Stock Movers 

Alibaba Group Holding advanced 7.6% to $176.97 after the company rolled out new AI products and announced its plans to invest more in artificial intelligence. 

The company plans to ramp up artificial intelligence spending from the previously announced 380 billion yuan, or $53 billion, over the next three years, CEO Eddie Wu said at the company's annual conference.

Lithium Americas Corp. jumped 67% to $5.14 after a Reuters report suggested that the Trump administration is looking to renegotiate terms of the Energy Department's loans in exchange for a 10% equity stake. 

The lithium mine in Nevada, known as Thacker Pass, is expected to go live in 2028, and General Motors controls a 38% stake in the mining project. 

Micron Technology decreased 1% to $164.91, and the advanced chip maker reported strong growth in revenue and adjusted earnings, and the company guided $12.5 billion in revenue in the current quarter.