The Dow Jones and the S&P 500 rose to historical maximums on Friday, despite the fact that the paralysis of the US government was extended for the third day, since the expectations of cutting the interest rates were strengthened.
The actions of the great technological ones fell mostly, which caused a decrease in Nasdaq. The APPLIED Materials actions fell after the chip equipment manufacturer predicted an impact of 600 million dollars on the tax revenues of 2026.
Tesla’s actions also fell, while the electric of the S&P 500 rose.
The partial closure of the US government lasted for the third day. Investors could still digest a survey of the Management and Supply Institute, which showed that the employment index in the services sector contracted for the fourth consecutive month. The news reinforced the arguments in favor of more cuts in interest rates by the Federal Reserve.
“In recent days, it seems that the impulse is on the side of investors,” said Mona Mahajan, head of Edward Jones investment strategy.
It seems that “the probability of a Fed rates cut has risen since the closure began,” he said. “Maybe it is because there is a potential impact on the economy or some weakest employment data this week or the ISM data this morning (…) the expectation is that we are still in this environment in which the Fed will cut the types.”
Find out: frozen payroll data give Wall Street free time, but they are a big problem to read the economy
Historically, the market has not been affected by government closures, but some strategists said a long paralysis could create more uncertainty for investors and for monetary policy of the Federal Reserve.
According to preliminary data, the S&P 500 won 0.47 points, or 0.01%, at 6,715.82 points, while Nasdaq Composite lost 63.19 points, or 0.28%, at 22,780.86. The Dow Jones industrial average rose 242.00 points, 0.52%, to 46,761,72 units.
“The market usually ignores government closures because they do not usually last long and do not have a long -term negative impact on the economy,” said Anthony Saglimbene, a strategist head of the Amerprise Financial Market.
“But the more time passes … it means that the collection of data for really important reports could be delayed, or could cloud some of the data that we will finally obtain because data collection did not occur for a long period.”
With Reuters information.
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