Wall Street continues to hit new highs amid political turmoil

Photo caption — Traders at the New York Stock Exchange, USA. Photo: THX/TTXVN

Despite the US government entering its third day of shutdown due to budget impasse, key indexes maintained their upward momentum and continuously set new highs.

At the end of the trading session on October 3, the S&P 500 index increased slightly by 0.01% to 6,715.79 points, but still marked a new record high. The Dow Jones index also reached a peak when it increased by 0.51% to 46,758.28 points. The Nasdaq Composite index alone decreased by 0.28% to 22,780.51 points after the technology stocks group was under pressure to correct.

The biggest selling pressure came from Applied Materials, which fell 2.7% after the semiconductor maker forecast a $600 million decline in revenue for fiscal 2026. Tesla also lost 1.4%. Utilities rose 1.2%, leading the S&P 500 higher.

The September 2025 jobs report was not released due to the US government shutdown, but investors still closely watched data from the Institute for Supply Management (ISM) showing that the service sector employment index declined for the fourth consecutive month - a signal that reinforced expectations that the Fed will continue to ease monetary policy.

According to CME's FedWatch tool, traders are almost certain the Fed will cut interest rates by another 0.25 percentage point at this October meeting, and the probability of another cut in December has increased to 84%.

Despite the US federal government shutdown entering its third day, the US stock market has maintained its upward momentum. According to analysts, investors often "ignore" shutdowns because they are usually short-lived and have little long-term impact on the economy . However, if the budget stalemate persists, the disruption of economic data could complicate the Fed's policy decision-making process.

“The issue is timing,” said Anthony Saglimbene, chief market strategist at Ameriprise Financial. “If the shutdown continues for a long time, the data collection for key reports will be slowed or distorted.”

This weekend's session marked the end of an impressive week with all three Wall Street indexes rising. Specifically, the Dow Jones and S&P 500 both rose 1.1%, while the Nasdaq rose 1.3% for the week.

Investors were optimistic from the beginning of the week (September 29-30) despite the imminent risk of a government shutdown. The session on September 30 saw the Dow Jones set a new record high of 46,397.89 points thanks to expectations of a Fed rate cut and a wave of investment in artificial intelligence (AI) continuing to support the market.

As the US government officially shut down on October 1, the market did not lose its upward momentum. The October 1 session still recorded green for all three key indexes, led by healthcare stocks, after Pfizer reached an agreement with the Trump administration to reduce drug prices in the Medicaid program, helping Biogen and Thermo Fisher stocks increase by 10.9% and 9.4%, respectively.

By October 2, the market had continued to soar, pushing the S&P 500 and Nasdaq to new records, with investors largely convinced that the Fed would be forced to act more cautiously amid the economic risks posed by government shutdowns and a weak labor market.

Experts say the outlook for the US stock market in the coming time still depends largely on the Fed's interest rate policy and political developments in Washington. If the government shutdown lasts longer and weakens economic data further, the Fed will likely continue to lower interest rates to support growth.

“In the short term, interest rates and investment flows into strategic sectors such as AI will continue to support the market. However, if the budget impasse persists, this could significantly change the economic outlook and market direction in the coming weeks,” said Saxo expert Neil Wilson.

Source: https://baotintuc.vn/thi-truong-tien-te/pho-wall-lien-tuc-lap-dinh-giua-bat-on-chinh-tri-20251004112006872.htm