A retreat in US stocks picked up pace on Thursday as investors absorbed the end of the longest government shutdown in US history, weighing its impact on the economy and the path of interest rates.
The tech-heavy Nasdaq Composite (^IXIC) led losses with a 1.8% slump, while the S&P 500 (^GSPC) sank 1.2%. The Dow Jones Industrial Average (^DJI) dropped 0.9%, or over 400 points, to backtrack on its second record close in a row.
The Dow struggled amid a 4% drop for component Nvidia (NVDA) as a rotation out of techs to less highly valued sectors resumed. Disney’s (DIS) 9% fall after disappointing earnings also weighed on the blue-chip benchmark. Tesla (TSLA) shares lost over 6%.
In Washington, President Trump signed a bill ending the record-setting 43-day US federal shutdown into law after the House passed the measure in a 222-209 vote on Wednesday evening.
The stoppage is likely to have long-reaching effects, and an analysis from the Congressional Budget Office found that US GDP could be roughly $11 billion lower by the end of 2026 than previously expected.
But Wall Street’s questions about the economy are set to persist after the White House said reports delayed by the closure “will be permanently impaired” and will likely never be released. Data on inflation and the jobs market in October are up in the air, though a top Trump adviser said Thursday that the jobs data may be released — but without a read on that month’s unemployment rate.
That uncertainty about the economic outlook is complicating bets on interest-rate cuts in December and next year, as it could impact the Federal Reserve’s thinking. Markets are pricing in a roughly 50-50 chance of a reduction at policymakers’ meeting next month after a wave of hawkish commentary from officials on Wednesday, compared with around 95% odds a month ago.
On the corporate front, Cisco (CSCO) stock climbed over 4% after its earnings showed progress on capturing AI spend by hyperscalers. The networking-gear giant raised full-year forecasts for profit and sales, outstripping analysts’ estimates.
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