The NASDAQ Composite saw a decline of 0.3%, even as technology stocks continued to lead the market to record highs. On Thursday, all three major U.S. indexes reached unprecedented heights, buoyed by ongoing optimism surrounding chipmaking stocks linked to artificial intelligence. However, the overall gains appeared to be diminishing as the government shutdown extended into its third consecutive day. The Dow Futures increased, following gains in the technology sector that led to another session of record highs, even amid rising uncertainty surrounding the continuing government shutdown and postponed payroll data. The Dow Jones Industrial Average increased by 302 points, representing a rise of 0.7%, while the S&P 500 index experienced a modest climb of 0.1%. The S&P 500 has increased by approximately 1.1% for the week, while the Dow Jones Industrial Average has risen by 0.6%, and the NASDAQ Composite has advanced by 1.6%. Treasury Secretary Scott Bessent cautioned in a interview on Thursday that this shutdown may have a more detrimental impact on the economy compared to previous instances. Historically, shutdowns have exerted a limited influence on financial markets and the broader economy. The most recent government shutdown took place during Trump’s initial term, spanning 35 days from late 2018 to early 2019.

The Congressional Budget Office projected an economic impact of $11 billion resulting from that shutdown, which stands as the longest in U.S. history. Analysts assert that a cooling U.S. labor market poses a “bigger worry” for financial markets than the current U.S. government shutdown. In a note to clients, the analysts indicated that, historically, a shutdown of the federal government is “unlikely to make much impact” on investors even if “it drags on for some time.” A softening in the labor picture indicates “downside risks” for various asset classes, including equities, U.S. Treasury yields, and the dollar, they contended. A significant outcome of the shutdown was the probable delay of the monthly nonfarm payrolls report, which was originally scheduled for release later today. The Federal Reserve has been closely monitoring labor market statistics, as policymakers consider a possible sequence of interest rate cuts aimed at stimulating hiring and investment, though this approach carries the risk of exacerbating inflationary pressures. Thursday’s Challenger layoffs data indicated a reduction in layoffs for September, while ADP data revealed a significant decrease in private payrolls during the same month. On Friday, investors will primarily focus on figures from the Institute for Supply Management, which will provide insights into the activity within the crucial U.S. services sector. The ISM’s non-manufacturing purchasing managers index for September may offer valuable insights into the impact of extensive U.S. tariffs on a sector of the economy that constitutes a significant portion of overall output. The figure is projected to decline to 51.8, down from 52.0 in August. A reading exceeding 50 signifies expansion.

Oil prices experienced an upward movement; however, they remained poised for their most significant weekly decline since late June, driven by market anticipations that the OPEC+ coalition might increase production further. Brent futures increased by 0.4% to $64.39 a barrel, while U.S. West Texas Intermediate crude futures saw a rise of 0.5% to $60.75 per barrel. Both benchmarks experienced a decline of nearly 2%, reaching their lowest point since early June in the prior session, and were on track for an approximate 8% drop for the week. Sentiment continues to be cautious following reports earlier this week indicating that the Organization of Petroleum Exporting Countries and its allies, collectively referred to as OPEC+, may raise output by as much as 500,000 barrels per day in November, a figure that is three times the volume added this month.

Gold prices appeared poised to achieve a seventh consecutive weekly rise, supported by expectations of additional Federal Reserve interest rate cuts and apprehensions regarding a potential U.S. government shutdown. Despite concerns that the shutdown may postpone the release of significant economic indicators, market participants largely maintain the belief that the Federal Reserve will reduce interest rates once more at its upcoming policy meeting later this month. Spot gold experienced an increase of 0.3%, reaching $3,866.29 per ounce, while December gold futures rose by 0.6% to $3,889.00 per ounce as of 06:58 ET. Bullion, typically exhibiting stronger performance in low interest rate environments, has surged by approximately 46% over the past year.