A trader works on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., September 15, 2025. REUTERS/Brendan McDermid

By Sinéad Carew and Niket Nishant

NEW YORK (Reuters) -Wall Street's three major indexes managed to close Tuesday's choppy session higher, also marking quarterly and monthly gains, even as investors braced for a U.S. government shutdown, which would delay key economic reports and muddy the Federal Reserve's interest rate policy outlook.

While Tuesday's gains were modest, the benchmark S&P 500 and the tech-heavy Nasdaq and the Dow all gained for the second quarter in a row. For the S&P 500 and the Dow, it also marked their fifth straight monthly gain while the Nasdaq registered its sixth straight monthly gain.

U.S. President Donald Trump warned congressional Democrats on Tuesday that allowing the federal government to shut down at midnight would allow his administration to take "irreversible" actions including shutting down programs important to them. While previous shutdowns have had a limited impact on markets, some analysts warned that this time could be more disruptive, given the delicate economic backdrop.

Meanwhile, a Labor Department report on Tuesday showed job openings increased marginally in August, while hiring and layoffs declined. Another data point showed U.S. consumer confidence declined more than expected in September.

The latest jobs data did not suggest significant job losses, but Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia, said, "it's a very balanced market that could be tipped either way very quickly." He said the market's leadership mix of defensive sectors such as healthcare and consumer staples along with more cyclical sectors such as industrials showed a lack of "significant conviction directionally."

"Maybe there's some position-squaring in advance of the prospect of a government shutdown," Luschini said. "Were that to occur, and last beyond Friday, we'll start to accumulate significant economic data such as the jobs report on Friday that won't be released. That leaves investors a little bit in the shadows with regard to what's going on on the ground."

According to preliminary data, the S&P 500 gained 26.61 points, or 0.40%, to end at 6,687.82 points, while the Nasdaq Composite gained 64.58 points, or 0.29%, to 22,655.74. The Dow Jones Industrial Average rose 89.74 points, or 0.19%, to 46,405.81.

Healthcare sector gainers included Pfizer, which rallied after Trump said it will cut the price of all prescription drugs in the Medicaid program for low-income Americans and sell new prescription drugs at a "most favored nation" price in exchange for tariff relief. Helping other healthcare stocks to rally, Trump also said he expects other drugmakers to follow suit.

The Dow Jones Transport Average Index fell, with airlines leading declines due to the government shutdown threat. A group representing major U.S. airlines had warned on Monday that a partial federal government shutdown could strain American aviation and slow flights, as air traffic controllers and security officers would be forced to work without pay and other functions would be halted. Southwest Airlines and United Airlines were among the decliners.

Meanwhile, Fed Vice Chair Philip Jefferson warned that the job market could face stress without central bank support, while Boston Fed President Susan Collins said she was open to additional rate cuts.

In individual stocks, chipmaker Wolfspeed surged a day after exiting bankruptcy. Firefly Aerospace shares sank following a testing mishap that destroyed the core booster for its centerpiece Alpha rocket.

Lamb Weston shares rose after the frozen-potato products maker beat analysts' estimates for first-quarter revenue and profit.

(Reporting by Sinéad Carew in New York, Niket Nishant and Sukriti Gupta in Bengaluru; Editing by Anil D'Silva, Pooja Desai and Matthew Lewis)