Government Shutdown Hits Markets as Nike Soars on Earnings

The failure of legislators to agree on a continuing resolution by the September 30 deadline triggered an immediate government shutdown at midnight, plunging federal operations into chaos and creating significant market uncertainty. According to the Congressional Budget Office, approximately 750,000 government employees will be forced to suspend work, with both civilian and military personnel going without pay until Washington resolves the political impasse. While essential services such as air traffic control will continue operating with unpaid staff, nonessential services across multiple agencies have ground to a halt, creating ripple effects throughout the economy.

The shutdown’s impact extends far beyond federal payrolls, with critical economic data reporting now in jeopardy. The Social Security Administration will continue making payments but will slow processing of new applications, while the Food and Drug Administration (FDA) has halted review of drug applications entirely. Perhaps most concerning for market participants is the uncertainty surrounding this week’s expected jobs report, which may not be published due to the government closure. The Congressional Budget Office’s estimate of 750,000 affected workers means unemployment will inevitably rise as these government employees are temporarily removed from payrolls, creating a distorted picture of the labor market.

While political turmoil dominated headlines, Nike (NKE) delivered a powerful counter-narrative with exceptional quarterly results that sent its stock racing more than 4% higher. The athletic apparel giant reported a Q1 profit of $0.49 per share, soundly beating analyst expectations, while revenue reached $11.7 billion, also exceeding forecasts. This strong performance provided crucial support to the broader S&P 500, helping to cut the Vanguard S&P 500 ETF’s (VOO) early losses by half, from 0.4% down to just 0.2% as trading got underway.

Nike’s earnings beat came at a critical moment for markets grappling with multiple sources of uncertainty. The company’s ability to exceed both profit and revenue expectations demonstrated that corporate America continues to operate effectively despite Washington’s dysfunction. The buying activity in Nike shares, as a component of the S&P 500, provided tangible evidence that strong fundamental performance can still attract investor capital even during periods of political and economic uncertainty.

Beyond Nike’s standout performance, other corporate earnings painted a more mixed picture of the economic landscape. ConAgra (CAG) joined Nike in the positive column, beating Q1 2026 earnings expectations by six cents with a $0.39 per share profit and edging out sales forecasts with $2.6 billion in revenue. The food company’s guidance for full-year profit between $1.70 and $1.85 per share aligned with analyst expectations, sending its stock up more than 2% premarket.

However, not all corporate news provided comfort to investors. Egg producer Cal-Maine Foods (CALM) missed earnings expectations by a substantial 53 cents, reporting Q1 earnings of $4.12 per share despite revenue coming in ahead of forecasts at $922.6 million. This earnings disappointment compounded concerns raised by ADP’s (ADP) September payroll report, which showed private employers cutting 32,000 jobs instead of growing by 45,000 as forecast. The combination of missed earnings and weak employment data created additional headwinds for markets already grappling with the government shutdown’s implications.

The conflicting signals from corporate America and economic data created a complex environment for investors. While strong performers like Nike and ConAgra demonstrated that well-managed companies can thrive despite macroeconomic challenges, the broader picture suggested increasing economic strain. The government shutdown’s disruption to economic data reporting only compounds the uncertainty, leaving market participants with an incomplete picture of the true state of the U.S. economy as they navigate this period of political and financial volatility.