U.S. stock market closes at new highs as Dow and S&P rise while Nasdaq slips
U.S. equities finished the session higher, with the Dow Jones Industrial Average and the S&P 500 posting fresh highs, while the Nasdaq Composite drifted lower. The move comes as investors weigh softer economic signals against the possibility of further Federal Reserve easing and the potential impact of a government shutdown continuing into its third day.
Techs weigh on the Nasdaq as semis and EVs waver
In the session, semiconductor equipment giant Applied Materials (AMAT) fell about 2.7% after management signaled that 2026 revenue would be roughly $600 million lower than previously expected. Electric-vehicle leader Tesla (TSLA) also retreated, slipping roughly 1.4%. By contrast, shares in S&P utilities (+~1.2%) helped offset broader tech pressure, underscoring the mixed leadership in the market on this day.
ISM services data bolster rate-cut bets
The Institute for Supply Management’s September non-manufacturing index showed the employment component remaining below the 50-mark for a fourth consecutive month, hinting at ongoing softness in the labor market. That backdrop reinforced expectations that the Federal Reserve could accelerate its pace of rate cuts should the softer data persist, particularly as financial markets weigh potential spillovers from the ongoing government shutdown.
Investor perspective on policy and momentum
Edward Jones’ head of investment strategy, Mona Mahajan, noted that since the government shutdown began, markets have priced in a higher probability of imminent Fed easing. She said the ISM softness adds to the case for monetary accommodation, while highlighting the broader risk that a protracted shutdown could complicate the economy’s recovery path.
Market breadth and trading activity
Market breadth showed more advancers than decliners on the New York Stock Exchange by about 1.72 to 1, and Nasdaq also favored advancers with a ratio around 1.5 to 1. This demonstrates ongoing participation despite leadership rotating among sectors. The combined U.S. exchange volume reached roughly 20.47 billion shares, above the 20-day average of about 19.01 billion, suggesting solid investor engagement as headlines and data flow continue to shape sentiment.
What this means for investors
With the government shutdown in its third day and key macro indicators turning softer, investors will likely keep a close eye on upcoming ISM releases, additional Fed communications, and potential fiscal developments. The market’s ability to hold gains in the face of mixed leadership and policy uncertainty may hinge on whether the softer data translates into sustained consumer and business caution or whether rate cuts can bolster growth expectations further.
