U.S. stock futures showed positive movement on Monday as the federal government shutdown progressed into another week, signaling a potential continuation of the strong market rally that has driven major indexes to new record highs. Futures for the Dow Jones Industrial Average rose by 0.1%, while those for the S&P 500 gained 0.3%. Leading the upward trend, contracts for the tech-heavy Nasdaq 100 increased approximately 0.5%.
These modest gains come after a successful week in the market, where the S&P 500 and Nasdaq Composite each marked their fourth weekly increase out of five, rising 1.1% and 1.3%, respectively. The Dow also experienced positive momentum, advancing 1.1% and securing its third positive week in four.
Despite the prolonged impasse in Washington regarding government funding, investors appear to be largely unfazed, having looked past the congressional stalemate. The ongoing shutdown has delayed crucial economic indicators, starting with the jobs report due on the upcoming Friday, which could shed light on employment trends.
Steve Sosnick, chief strategist at Interactive Brokers, remarked on the current sentiment in the market, saying, “There’s a certain amount of nihilism. All news is good news, and no news matters. By not getting this [jobs report], that’s one less impediment in the market’s relentless rise.”
Although the job data remains sidelined, investors will gain insights into the Federal Reserve’s economic outlook later in the week. Fed Governor Stephen Miran is scheduled to speak on Wednesday, with Chair Jerome Powell following on Thursday. Additionally, the University of Michigan’s consumer sentiment report for October is anticipated to be a key focus amid the shutdown’s continuation.
As the week progresses, third-quarter earnings reports will begin to be released, with notable results expected from companies such as PepsiCo, Delta Air Lines, and Levi Strauss.
In international markets, France’s stock benchmark, the CAC 40, declined significantly, dropping around 2% following the unexpected resignation of Prime Minister Sebastien Lecornu. This political upheaval weakened the euro against the dollar and caused the yield on French government bonds to rise, raising concerns about potential new elections in response to the developing political situation.
In Japan, stocks soared to new record highs after the confirmation of Sanae Takaichi as the likely next prime minister. The yen and long-term bond prices fell as investors anticipated an increase in government spending and a continuation of loose monetary policy following Takaichi’s selection as leader of the ruling Liberal Democratic Party (LDP).
Meanwhile, Hon Hai Precision Industry Co., Nvidia’s prominent server production partner, announced an 11% growth in quarterly sales, signaling robust demand for the chips and servers crucial for artificial intelligence development. The Taiwanese firm, also known as Foxconn, reported revenues of NT$2.06 trillion (approximately $67.6 billion) for the quarter ending in September, aligning with analysts’ expectations. The company foresees an uptick in sales for the current quarter, driven by strong demand in the AI sector, bolstering investor confidence in the ongoing expansion of AI infrastructure, which has increasingly involved major tech firms like Meta Platforms and startups such as OpenAI.
In the commodities market, gold prices approached the $4,000 mark, continuing their record-setting trajectory, buoyed by the ongoing government shutdown, further emphasizing the economic uncertainty.
