US Markets: The Nasdaq closed lower, while the S&P 500 and Dow Jones ended Friday with gains. Growing economic concerns, the longest federal government shutdown to date, and significantly high valuations of tech stocks led to reduced risk appetite, making last week a volatile one for the US markets.
All three major US stock indexes saw a significant drop during yesterday’s trading session. However, a strong recovery came as the session neared its close, particularly after reports that the deadlock in Congress regarding the shutdown was easing. As a result, both the S&P 500 and Dow showed gains by the end of the day.
Terry Sandven, Chief Equity Strategist at US Bank Wealth Management in Minneapolis, said, “A resolution to the shutdown would clearly improve sentiment, especially at a time when there is little room for error.” He added, “The stock market is at an all-time high, and valuations are also elevated. If the shutdown is resolved, it will remove another burden from investors’ minds.”
Compared to last Friday’s closing, all three indexes saw declines. The Nasdaq experienced its largest weekly drop since the end of March/early April. The pressure on the market was largely due to the high valuations of AI-related momentum stocks. AI stocks have seen substantial gains in recent months, which have now made them quite expensive.
Stock Market Close on Friday:
- The Dow Jones Industrial Average rose by 74.80 points, or 0.16%, closing at 46,987.10.
- The S&P 500 gained 8.48 points, or 0.13%, closing at 6,728.80.
- The Nasdaq Composite fell by 49.45 points, or 0.21%, closing at 23,004.54.
Weak earnings results led to a 5.2% drop in Microchip Technology shares. Tesla shareholders approved the largest corporate pay package in history for CEO Elon Musk, which led to a 3.7% decline in the electric vehicle maker’s shares. On the other hand, Expedia shares saw a significant rise of 17.6%, thanks to strong growth in its business-to-business segment.
