NEW YORK/LONDON — U.S. stocks and the dollar treaded water in choppy trade on Wednesday, while gold struck a record high as the U.S. government shut down much of its operations, delaying the release of crucial jobs data which could muddy the interest rate outlook.

U.S. private payrolls data that showed employment fell by 32,000 last month, bucking expectations for a 50,000 gain, added to concerns that the U.S. labour market might be weakening.

While weak employment data would typically add to bets on interest rate cuts that could support equity markets, the outlook is muddied this week by the government shutdown.

The U.S. Labor Department’s more comprehensive and closely-followed employment report for September will not be published on Friday due to the shutdown, an outcome that investors said would complicate the Federal Reserve’s ability to assess U.S. economic health as it weighs potential rate cuts.

“However you want to look at it … it’s a weakening labor market and the Fed is likely to continue on their cutting path through year-end in our view,” said Matthew Miskin, co-chief investment strategist at Manulife John Hancock Investments in Boston. “Not having other data points does make this harder for the Fed.”

With no clear path out of the impasse over a funding deal, agencies warned the government shutdown would lead to the furlough of 750,000 federal workers at a daily cost of $400 million.

The S&P 500 reversed earlier losses and was up 0.2% by the afternoon, the Nasdaq Composite also flipped into gains to add 0.3%, while the Dow Jones Industrial Average was flat. Moderate gains on Wall Street helped the MSCI All-World index .MIWD00000PUS to gain 0.3%.

Amid the uncertainty, gold prices climbed to $3,895 an ounce, hitting a record high for a third straight session, while the benchmark U.S. 10-year Treasury yield fell 4 basis points to 4.1116%.

European shares bucked the global trend, with the pan-continental STOXX 600 rising 1.2% to hover near a record high. Britain’s FTSE 100 and Switzerland’s SMI outperformed, boosted by healthcare stocks which jumped on expectations they could avoid excessive U.S. import tariffs after President Donald Trump struck a deal with Pfizer on prescription drug prices.

The healthcare sector has the third largest weighting in the STOXX 600.

“There’s a lot of political risk in the healthcare sector, but as you see this risk ease, investors will be buying,” said Lars Skovgaard, senior investment strategist at Danske Bank.

“I think this could give some support to European shares over the next couple of days.”

Shutdown to Delay Data

Without Friday’s nonfarm payrolls report, investors may place greater weight on the ADP National Employment Report.

“The general idea is that these things have a short-term impact, not a long-term one, and markets know it,” said George Lagarias, chief economist at Forvis Mazars.

“The lack of data will mean we assume the trend we have will continue. If there is no evidence of a strong economic rebound then the chances are that the Fed will continue on its present course.”

Futures now imply a 95% chance of a Fed rate cut in October, up from 90% from a day earlier, with around a 75% probability of another move in December.

Anthony Saglimbene, chief market strategist at Ameriprise, said that if the shutdown persists, September inflation reports in mid-October could also be affected.

“An extended period where the U.S. Bureau of Labor Statistics is not operating at full strength could affect data collection efforts for other reports, which may impact the quality of the data,” he said in a note.

Japan’s Nikkei dropped 0.9% on Wednesday after an 11% surge the previous quarter. South Korea’s shares rose 0.9%, adding to the 11.5% gain in the last quarter, after data showed its exports rose at the fastest pace in 14 months in September.

Dollar Falls

In foreign exchange markets, the dollar index slipped for a fourth straight day and was last down 0.1% to 97.78.

The euro slipped 0.1% to $1.1724, while sterling was up 0.2% at $1.3475.

The dollar was off 0.5% at 147.16 yen, after a Bank of Japan survey showed confidence among big Japanese manufacturers improved for a second quarter, heightening the chance of an interest rate hike as soon as this month.

Oil prices fell further after two consecutive days of losses as investors weighed potential OPEC+ plans for a larger output hike next month.

U.S. crude was down about 1% at $61.71 a barrel, while Brent was 1% lower at $65.35.

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(Reporting by Samuel Indyk, Stella Qiu and Ankur Banerjee. Editing by Mark Potter and Nick Zieminski)