Market Update: S&P 500 Rebounds Amidst Government Shutdown
On October 1, 2025, trading floors at the New York Stock Exchange (NYSE) reverberated with renewed activity as traders responded to a market shift.
Despite an interruption to a seven-day winning streak, the S&P 500 saw a rebound, gaining 0.4%. The resurgence primarily stemmed from advances in the information technology and utilities sectors, both of which are on track to achieve new closing highs.
However, this optimism contrasts with the backdrop of the ongoing U.S. government shutdown, now in its second week.
The Nasdaq Composite climbed 0.6%, while the Dow Jones Industrial Average added 99 points, translating to a modest increase of 0.2%.
Significantly, shares of Nvidia surged nearly 2% following CEO Jensen Huang’s remarks about heightened demand in recent months. In an interview with CNBC, Huang noted, “This year, particularly in the last six months, demand for computing has increased substantially.”
He further expressed regret over not investing more in Elon Musk’s artificial intelligence venture, xAI, describing his enthusiasm for potential financing opportunities.
This positive sentiment follows a day marked by declines correlated with a report indicating Oracle’s disappointing cloud margins. Analysts had anticipated better profitability, raising concerns about the broader sustainability of the artificial intelligence trade, reminiscent of the late 1990s tech bubble.
Many investors are now advocating for a rebalancing of portfolios, acknowledging that, while the AI rally appears robust, it may reach a crescendo before tapering off.
Liz Thomas, head of investment strategy at SoFi, articulated this sentiment, stating, “We had a long rally. Everything feels extended. It feels exciting. It feels euphoric. In reality, I still think that the euphoria can get even more euphoric before something has to actually turn.”
As the government shutdown extends into its eighth day, the Senate is poised to vote again on measures to resume operations. Despite five unsuccessful attempts to pass a temporary funding bill earlier this week, market sensitivity to these developments has remained muted.
Wall Street’s attention is now also fixed on anticipated minutes from the Federal Reserve, which could shed light on the composition and decisions stemming from the contentious September meeting.
Source link: Cnbc.com.
