S&P 500 Hits Record High, Shrugs Off Government Shutdown as Traders Eye Quick Resolution
S&P 500 Hits Record High, Shrugs Off Government Shutdown as Traders Eye Quick Resolution
The S&P 500 surged to a new all-time intraday high yesterday, October 1st, demonstrating remarkable resilience as traders bet on a short-lived U.S. government shutdown. The broad market index climbed 0.4%, rebounding from an earlier 0.5% dip, signaling investor optimism that the funding lapse will have minimal long-term economic repercussions.
Both the Nasdaq Composite and the Dow Jones Industrial Average mirrored the positive sentiment, with the Nasdaq rising 0.4% and the Dow gaining 96 points, or 0.2%. The market’s upward momentum was significantly driven by strong performances in health-care stocks, notably Regeneron Pharmaceuticals and Moderna. This rally caps off a strong September, which saw the S&P 500 increase by over 3.5%.
The government officially shut down after the Republican-controlled Senate failed to pass a temporary spending bill on Tuesday, September 30th. Democrats are leveraging the measure to push for an extension of critical health care tax credits for millions of Americans.
Market analysts, including Louis Navellier, founder of Navellier & Associates, observed the market’s calm demeanor. “The market appears unconcerned,” Navellier stated, adding, “The hopeful dip buyers are going to have to wait. Momentum remains positive.” While stock markets have historically navigated government shutdowns with relative ease, this current situation presents unique risks, given ongoing concerns about a slowing labor market, inflation, and historically elevated stock valuations.
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