The S&P 500 hit a new record high on Thursday, with investors largely brushing aside worries over the ongoing US government shutdown.
The benchmark index gained 0.2%, while the Nasdaq Composite advanced 0.6% to reach its own record level. The Dow Jones Industrial Average added about 31 points, or 0.1%.
The market sentiment seems to be driven by private data amid the government shutdown. The investors closely analysed Wednesday’s ADP report, which missed expectations and bolstered hopes for Federal Reserve rate cuts later this month.
On Thursday, the chip stocks are witnessing a global boom with major partnerships in play, while Treasury yields and gold prices reflected caution amid uncertainty.
Wall Street open: What happened in pre-market trade?
US markets displayed modest gains with futures tied to S&P 500 and the Nasdaq advancing amid tech boom.
The investors are getting more optimistic about a possible rate cut this month as Wednesday’s ADP report highlighted a cooling labor market with a loss of 32,000 jobs in September.
Sector-wise, tech stocks and healthcare led the gains, continuing their strong momentum from the previous session, where the S&P 500 closed at a record high.
The energy sector saw notable activity as Occidental Petroleum’s shares surged pre-market after Berkshire Hathaway announced a significant acquisition of Occidental’s petrochemical division.
Commodities reflected mixed trends; gold prices hit a fresh record due to safe-haven demand amid shutdown jitters, while crude oil slipped on speculation about potential OPEC+ production increases.
Treasury yields dropped sharply as investors sought the safety of bonds, further signaling market anticipation of looser monetary policy.
Overall, the market remained resilient despite the lack of fresh economic data, driven by policy hopes and corporate developments.
Trump sees shutdown as opportunity
As the US government shutdown enters its second day on Thursday, the investors are looking more settled as Wall Street has a history of ignoring short-term political deadlocks.
But what is of particular concern is making financial decisions without key economic data points.
The Trump administration also indicated that if the government shutdown extends beyond a certain point, many federal workers may face layoffs.
Going a step further in his political campaign, US President Donald Trump said on Thursday that with the shutdown, he has received an “unprecedented opportunity” to slash “Democrat Agencies.”
In a post on Truth Social, Donald Trump said:
I have a meeting today with Russ Vought, he of PROJECT 2025 Fame, to determine which of the many Democrat Agencies, most of which are a political SCAM, he recommends to be cut, and whether or not those cuts will be temporary or permanent. I can’t believe the Radical Left Democrats gave me this unprecedented opportunity. They are not stupid people, so maybe this is their way of wanting to, quietly and quickly, MAKE AMERICA GREAT AGAIN! President DJT
The development indicates that the United States must brace for a long shutdown as both Republicans and Democrats are nowhere near a deal.
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