US Stocks Hit New Highs Despite Shutdown Concerns
US stocks continued their upward trajectory on Wednesday, with the S&P 500 and the Nasdaq 100 marking their fourth consecutive day of gains. The health-care sector led the rally, buoyed by optimism surrounding Pfizer Inc.'s deal with the White House. Meanwhile, concerns about USA policy stability lingered due to the ongoing government shutdown.
The S&P 500 index climbed 0.3% to close at a new record, while the Nasdaq 100 also rose for the fourth straight session. Tech names such as Tesla Inc. and Nvidia Corp. contributed to the broad market rally. However, the government shutdown threatens to magnify long-term concerns about USA policy stability.
The shutdown also poses another challenge: a blackout in crucial economic data that the Federal Reserve relies on for its rate decisions. The September nonfarm payroll report, for instance, remains uncertain due to the shutdown. Despite this, some investors anticipate that the Fed will still deliver a 25 basis point 'insurance' cut at the October meeting, even without the payroll data. This expectation was reinforced by the ADP report, which showed a surprise drop in private sector payrolls in September, indicating a slowing labor market.
US stocks ended Wednesday's session higher, with the S&P 500 notching a new record. The rally was supported by tech names and health-care stocks, despite lingering concerns about the government shutdown's impact on USA policy stability and economic data. Treasury yields fluctuated, with the 10-year yield touching 4.08% before hovering around 4.10%. Investors continue to monitor the shutdown's effects and the Fed's potential rate decision later this month.
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