Wall Street indexes climb as investors dismiss government shutdown concerns

Wall Street’s major indexes closed higher Monday, with the Nasdaq leading gains as investors purchased heavyweight technology stocks and disregarded concerns about a potential U.S. government shutdown and hawkish Federal Reserve commentary.

The major averages finished in positive territory, though off early highs.  Investors demonstrated resilience, buoyed by expectations of Fed rate cuts and positive corporate developments despite federal funding debates threatening delays to key economic data releases.

Technology stocks provided the S&P a boost as investors wagered on artificial intelligence growth prospects and anticipated continued Fed rate cuts amid persistent inflation concerns and labor market uncertainties.

Traders awaited Friday’s Labour Department jobs report, expected to show 50,000 new jobs in September—data that could influence rate outlooks but faces potential delays if the government shuts down.

Electronic Arts surged 4.5% after announcing its acquisition by a consortium comprising PIF, Silver Lake, and Affinity Partners in an all-cash transaction valuing the video game maker at approximately $55 billion. Robinhood jumped over 12 % as prediction market activity soared.

Gold prices surged past $3,800 per ounce for the first time on Monday, reaching a record high as investors sought the safe-haven asset amid expectations of a U.S. rate cut, fears of a shutdown, and escalating geopolitical tensions.

The US government shutdown threat cast a shadow across asset classes, with the Tuesday midnight funding deadline less than 24 hours away.

Nifty extended its losing streak for a seventh straight session yesterday, closing with a marginal fall of 19 points at 24,634. This marked yet another session characterized by high volatility and pronounced two-way swings.

The Indian Rupee settled at a record low of 88.76 levels against greenback, exhibiting marked underperformance among Asian currencies. This depreciation is primarily attributed to sustained month-end dollar demand and continuous, substantial outflows of Foreign Institutional Funds (FIIs) from the domestic equity markets, collectively dampening overall investor sentiment.

Supports for the Nifty are seen at 24606 and 24400. On the upside, 24791 and 24908 could offer resistance in case of pullbacks.

Derivatives indicators at extremely low levels suggest higher possibility of some recovery in the markets ahead of today’s monthly expiry.

Indian markets are poised to open mildly higher in line with international cues.

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Source: HDFC Securities Prime Research