Record Highs for S&P 500, Nasdaq as Wall Street Shrugs Off Deepening Government Shutdown, Eyes AI
Record Highs for S&P 500, Nasdaq as Wall Street Shrugs Off Deepening Government Shutdown, Eyes AI
Despite a deepening U.S. government shutdown now in its second week, the S&P 500 and Nasdaq Composite soared to new all-time intraday and closing highs on Wednesday. The benchmark S&P 500 climbed 0.58% to close at 6,753.72, while the Nasdaq Composite advanced 1.12% to finish at 23,043.38. The Dow Jones Industrial Average, however, saw a slight dip, falling 1.20 points to 46,601.78.
Market sentiment remained largely unperturbed by the ongoing shutdown, which entered its eighth day on Wednesday following repeated failures in the Senate to pass stopgap funding bills. President Donald Trump has even hinted that not all furloughed federal workers may receive back pay, with active-duty military members potentially missing their Oct. 15 paycheck.
A significant driver for the market’s ascent appears to be renewed optimism around artificial intelligence. Nvidia shares rose 2% after CEO Jensen Huang reported a substantial increase in computing demand over the past six months, confirming the company’s involvement in funding Elon Musk’s xAI startup. This comes despite recent concerns about an ‘AI bubble’ following a report on Oracle’s cloud business margins and its deals involving Nvidia’s chips, which had briefly snapped the broad market’s seven-day winning streak.
Analysts like Baird’s Ross Mayfield suggest that while corrections in tech stocks are possible, the underlying demand for AI chips and software remains strong, reassuring investors that current spending isn’t entirely circular. The market also showed little reaction to the Federal Reserve’s September meeting minutes, which revealed a divided central bank following its first rate cut of 2025.
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