U.S. stocks rose on Friday, with the Dow Jones Industrial Average hitting 47,000 for the first time, as investors shrugged off a government shutdown and the delay of the September jobs report. The Dow rose 0.95%, or more than 440 points, while the S&P 500 gained 0.4%. The Nasdaq Composite wavered between small losses and gains, weighed down by Tesla.
The rally capped a strong week, fueled largely by AI enthusiasm and expectations for additional rate cuts. Investors relied on private-sector data confirming labor market weakness, as the shutdown delayed official government releases. Meanwhile, new AI deals and strong performances across defensive sectors kept momentum alive.
Market Movers:
- Nvidia (NVDA): Shares dipped nearly 1% even as the company expanded ties with Fujitsu on AI projects. Investors may be taking profits after a sharp run-up, though Nvidia remains central to the broader AI rally.
- Tesla (TSLA): The stock weighed on the Nasdaq after sliding on concerns over softening demand and intensifying price competition in the EV market. The decline capped an otherwise upbeat week for large-cap tech.
- Chevron (CVX): Shares held steady after a fire broke out at its El Segundo refinery in California. With no injuries or evacuations reported, investors looked past the incident, focusing instead on OPEC+ supply decisions.
- McDonald’s (MCD): The stock inched higher as analysts pointed to the return of its Monopoly game promotion in the U.S. for the first time in nearly a decade, forecasting an uptick in traffic and sales.
- Rigetti Computing (RGTI): The quantum stock jumped after announcing new system sales worth $5.7 million and building on double-digit gains earlier in the week. Peer firms D-Wave and Quantum Computing also extended their rallies.
Shutdown Clouds Data, Boosts Rate Cut Bets
The government shutdown entered its third day, delaying the release of the September jobs report. While economists had expected about 50,000 job additions and an unemployment rate of 4.3%, investors were left with private data showing clear labor market softening. The absence of official figures adds uncertainty for the Federal Reserve, which meets later this month after cutting rates in September. Traders increasingly believe the Fed could lean dovish again if economic indicators continue to weaken.
AI Momentum Expands Beyond Tech
The latest wave of AI-driven optimism has spread into sectors well beyond Silicon Valley. Industrial and utility stocks hit all-time highs on Friday as investors bet on rising demand for electrical upgrades and infrastructure to power the AI boom. This diversification underscores how Wall Street’s AI trade is broadening, pulling in traditional sectors that benefit from the technology’s ripple effects. OpenAI’s valuation climbing to $500 billion also reinforced investor enthusiasm, further cementing AI as the market’s dominant theme.
Inflation Concerns Resurface
The Institute for Supply Management’s services index fell into contraction for the first time since 2020, with activity slipping below 50%. Prices paid rose to 69.4%, near record highs, suggesting inflationary pressures remain sticky. Economists warn this could complicate the Fed’s policy path if inflation re-accelerates even as growth slows. Still, for now, markets appear more focused on the potential for easier policy than on inflation risks.
Looking Ahead
Investors close out the week with Wall Street near record highs, balancing optimism about AI and corporate earnings with uncertainty from Washington. The key question now is whether economic weakness will push the Fed toward further rate cuts—or whether inflationary signals in the service sector will slow that path. With the September jobs report and upcoming CPI release potentially delayed by the shutdown, traders will continue relying on alternative data and company updates to gauge the economy’s direction as earnings season approaches.