Tech Optimism Lifts Stocks as Shutdown Standoff Drags On

Markets pushed higher Thursday, led by strength in tech and semiconductors, despite escalating political uncertainty from an extended U.S. government shutdown. The Nasdaq 100 notched a second-straight record close, fueled by renewed AI enthusiasm following OpenAI's $500B valuation and chipmaker gains. Broader indexes were more muted as shutdown concerns delayed key economic data, complicating the Fed’s rate path. Bond yields edged lower, gold retreated from record highs, and oil continued its slide on supply concerns.

Key Headlines & Market Movers

• AI Momentum Reignites Tech Rally: A secondary share sale valued OpenAI at $500 billion, boosting optimism around artificial intelligence. Chipmakers surged globally, with the Philadelphia Semiconductor Index up 1.9% on news that SK Hynix and Samsung will partner with OpenAI on its new AI infrastructure. U.S. chip stocks including AMD, Broadcom, and Nvidia posted strong gains, helping lift the Nasdaq 100 to fresh highs.

Shutdown Delays Data, Fed Path Clouded: The ongoing government shutdown, now in its second day, is starting to disrupt economic visibility. Thursday's jobless claims were delayed, and Friday’s nonfarm payrolls report is likely next. A prolonged data blackout could complicate the Fed’s late October meeting, with some strategists warning that without timely inflation and labor data, rate cuts may be postponed.

• Tesla Falls Despite Stronger Deliveries: Tesla shares dropped over 5% after Q3 delivery numbers exceeded consensus but fell short of high investor expectations. Market reaction suggests growing concern over the broader EV market, as analysts warn of softening demand. The decline weighed on major indexes, partially offsetting tech sector strength.
• Credit Bureaus Slide on FICO Disruption: Fair Isaac shares soared 18% after unveiling a new tool allowing lenders to deliver FICO scores directly to borrowers, bypassing credit bureaus. TransUnion and Equifax fell 10% and 8%, respectively, as investors priced in the competitive threat. The announcement highlights how tech innovation is disrupting legacy financial infrastructure.

S&P 500 Sector Performance

Looking Ahead

Markets remain focused on two fronts: the duration of the U.S. government shutdown and whether the Fed will have enough visibility to proceed with expected rate cuts. If the stalemate drags into mid-October and delays inflation data, rate expectations could shift. For now, investors appear to be leaning into the AI growth narrative, even as macro uncertainty builds beneath the surface.

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