U.S. stocks finished the week on a high note, with Wall Street achieving new records. The S&P 500 rose by less than 0.1%, marking its seventh winning week in the last nine. The Dow Jones Industrial Average climbed 0.5%, both indices adding to their all-time highs set just a day earlier. In contrast, the Nasdaq composite experienced a slight setback, decreasing 0.3% from its own record.
Treasury yields inched upwards following mixed reports regarding growth in the U.S. services sector. While one report from the Institute for Supply Management indicated a slowdown in activity, another from S&P Global suggested that growth continues, albeit at a slow pace. The discrepancy in these reports has contributed to a cautious sentiment in the bond market.
Market Impacts of Economic Reports and Government Shutdown
The first Friday of each month typically sees Wall Street focused on the U.S. government’s monthly jobs report, which provides insight into job creation and the unemployment rate. This month, however, the release has been delayed due to the ongoing U.S. government shutdown, which is now in its third day. Historically, past shutdowns have had minimal impact on the economy or stock market. Despite the current situation, investors appear to be looking past these delays, maintaining a positive outlook on the market.
The excitement surrounding artificial intelligence continues to drive much of Wall Street’s momentum. Recently, Japan’s Hitachi signed a memorandum of understanding with OpenAI to explore AI capabilities. Following this announcement, Hitachi’s stock surged by 10.3% in Tokyo. However, concerns are mounting about a potential bubble in AI stocks, as significant capital inflows raise questions about long-term sustainability.
Sector Performances: Winners and Losers
In the energy sector, oil producers saw gains as crude oil prices rebounded from earlier losses. The price recovery alleviated concerns regarding high inventory levels that could exceed demand. Notably, Exxon Mobil rose by 2%, contributing to the broader gains in the S&P 500.
On the downside, Applied Materials faced a decline of 2.3%. The company, which supplies equipment for semiconductor manufacturing, announced an expected revenue hit of approximately $110 million in the fourth quarter due to new export restrictions imposed by the U.S. Commerce Department on certain Chinese customers.
In global markets, European and Asian indexes presented mixed results. Japan’s Nikkei 225 was particularly robust, climbing 1.9%, bolstered by the positive impact of Hitachi’s stock performance.
As the week concludes, the overall sentiment on Wall Street remains buoyant, with ongoing developments in the technology sector continuing to capture investor interest.