URGENT UPDATE: Wall Street is experiencing mixed results as fresh concerns over elevated technology valuations resurface, coinciding with the ongoing negotiations to end the longest government shutdown in U.S. history. The S&P 500 and Nasdaq Composite have dipped in early trading, causing alarm among investors hoping for a swift resolution.
In the latest developments, the ADP’s preliminary payroll figures revealed that private employers shed an average of 11,250 jobs per week for the four weeks ending on October 25. Jamie Cox, managing partner for Harris Financial Group, commented, “The ADP data misses a significant fraction of the overall labor market and does not provide much of a window into its health.” This data has dampened market sentiment following a notable relief rally earlier this week.
Earlier on Monday, technology and AI shares surged following the expectation that the government could reopen soon, contributing to a massive rally. However, this momentum is now faltering as investors reassess their positions. The Dow Jones Industrial Average rose by 72.81 points (0.16%) to 47,441.44, while the S&P 500 fell by 12.76 points (0.19%) to 6,819.67, and the Nasdaq Composite dropped by 105.88 points (0.45%) to 23,421.61.
The technology sector is feeling the strain, with information technology stocks weighing down the S&P 500 by 0.6%. Notably, shares of Nvidia plummeted 2.3% after SoftBank Group disclosed the sale of its remaining shares in the AI giant for $5.83 billion (approximately A$8.94 billion). Additionally, Nvidia-backed CoreWeave saw a staggering 10.8% drop in its shares after revising its annual revenue forecast lower.
As the shutdown drags on, it disrupts food benefits for millions and leaves federal workers unpaid, leading to increased urgency for a resolution. The U.S. Senate has approved a compromise bill aimed at ending the shutdown, which will soon head to the House of Representatives for final approval before reaching President Donald Trump for his signature. Betting markets such as Polymarket are fully pricing in a government reopening this week.
Cox added, “The shutdown will be substantively over by Thursday at the latest, and you will continue to see follow-through from Monday’s rally once the holiday has concluded.” This potential resolution has been met with cautious optimism among traders.
In other market movements, Paramount Skydance surged 8.7% after announcing significant cost cuts and plans to invest $1.5 billion in its streaming and studio divisions. Meanwhile, Rocket Lab shares jumped 4.7% following a record third-quarter revenue report, and Occidental Petroleum gained 3.6% after exceeding profit expectations for the same period.
As bond markets were closed for a public holiday, the trading environment remains uncertain. Advancing issues outnumbered decliners by a ratio of 1.66-to-1 on the NYSE and 1.23-to-1 on the Nasdaq. The S&P 500 recorded 14 new 52-week highs and one new low, while the Nasdaq Composite saw 29 new highs against 52 new lows.
Investors are advised to stay vigilant as developments unfold. The market’s response in the coming days will likely hinge on the resolution of the government shutdown and the health of the technology sector.
