Dow, S&P 500 manage record closing highs; Nasdaq falls in volatile session

**S&P 500 and Dow Reach Record Highs Amid Government Shutdown and Rate Cut Expectations**

The S&P 500 and Dow Jones Industrial Average both achieved record closing highs on Friday, navigating a volatile trading session amid an ongoing U.S. government shutdown. Despite the uncertainty, expectations for Federal Reserve interest rate cuts strengthened, fueled by weak economic data including a contraction in services employment.

Traders are now pricing in an almost certain Fed rate cut in October, with another probable reduction expected in December, despite concerns over the prolonged government shutdown’s impact on the economy.

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**Market Performance Amid Volatility**

On Friday, the S&P 500 barely edged out a record closing high despite market swings throughout the session. The Dow also posted a record close, while the Nasdaq ended lower, weighed down in part by weakness in the technology sector.

Shares of Applied Materials fell by 2.7% after the chip-equipment manufacturer forecasted a $600 million revenue hit for fiscal 2026. Tesla’s stock also declined by 1.4%. In contrast, utilities led gains among S&P 500 sectors, rising 1.2%.

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**Economic Data and Shutdown Impact**

The U.S. nonfarm payrolls report for September, traditionally a key economic indicator, was not released due to the government shutdown. Nevertheless, investors considered alternative data points, including a survey from the Institute for Supply Management showing that the services employment index contracted for the fourth consecutive month.

This weakening in services employment further strengthened the case for additional Federal Reserve interest rate cuts.

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**Investor Sentiment and Outlook**

“It certainly feels like momentum is on the side of investors over the last few days,” said Mona Mahajan, Head of Investment Strategy at Edward Jones.

Mahajan noted that “the market probability of a Fed rate cut has actually gone up since the shutdown began,” attributing this shift to potential economic impacts from the shutdown as well as weaker jobs and ISM data.

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**Additional Market Highlights**

– Insights on Budget 2025 and its potential effect on the share market have been trending on ETMarkets.
– Top trending stocks include SBI, Axis Bank, HDFC Bank, Infosys, Wipro, and NTPC.
– Other notable topics include discussions about existing H-1B holders’ opportunities, developments at Ola’s EV segment, competitive dynamics between Swiggy and Zomato, and emerging investment opportunities in consumption stocks with upside potential.

For more expert advice, stock alerts, and investment strategies, visit ETMarkets and stay informed on the latest financial market trends.

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*Stay tuned for further updates as the government shutdown continues and its full economic impact unfolds.*
https://economictimes.indiatimes.com/markets/stocks/news/dow-sp-500-manage-record-closing-highs-nasdaq-falls-in-volatile-session/articleshow/124301234.cms

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