The S&P 500 and the Nasdaq dipped on Tuesday as concerns around elevated technology valuations resurfaced, while markets closely watched progress toward the end of the longest government shutdown in U.S. history.
Dampening sentiment, a weekly update of ADP’s preliminary payroll figures showed that private employers shed an average of 11,250 jobs a week for the four weeks ended October 25.
“The ADP data misses a significant fraction of the overall labor market and (does) not provide much of a window into its health,” said Jamie Cox, managing partner for Harris Financial Group.
“There was such a large relief rally yesterday that markets are just taking a breather.”
On Monday, technology and AI shares rebounded from last week’s steep losses on expectations that the government could reopen this week, with the prolonged closure weighing on the economy and contributing to a data blackout.
The Nasdaq posted its largest daily gain since May 27 and the S&P 500 recorded its biggest one-day percentage rise since mid October in the previous session.
Wall Street gains on hopes of govt reopening
At 9:37 a.m. ET, the Dow Jones Industrial Average rose 72.81 points, or 0.16%, to 47,441.44, the S&P 500 lost 12.76 points, or 0.19%, to 6,819.67 and the Nasdaq Composite lost 105.88 points, or 0.45%, to 23,421.61.
Information technology stocks were the biggest weights on the S&P 500, down 0.6%. Gains in McDonald’s and Goldman Sachs kept the Dow afloat.
Nvidia shares dropped 2.3% after Japanese technology investor SoftBank Group disclosed that it had offloaded the rest of its shares in the AI bellwether for $5.83 billion.
Nvidia-backed CoreWeave’s shares dropped 10.8% after the cloud computing firm trimmed its annual revenue forecast.
Worries around AI-related companies that have been the main drivers of the bull market this year persisted as traders evaluated returns from technology and circular expenditure within the sector.
FEDERAL RE-OPENING AWAITED
The U.S. Senate on Monday approved a compromise that would end the shutdown that has disrupted food benefits for millions, left federal workers unpaid and snarled air traffic.
The bill will head next to the House of Representatives for approval before being sent to U.S. President Donald Trump for his signature, with betting markets like Polymarket fully pricing in a reopening this week.
“The shutdown will be substantively over by Thursday at the latest, and you will continue to see follow-through from Monday’s rally once the holiday has concluded,” Cox added.
Meanwhile, Trump said the U.S. faced an economic and national security disaster if the Supreme Court ruled against his use of an emergency powers law to impose sweeping tariffs.
Paramount Skydance gained 8.7%, topping the S&P 500, after the newly merged media firm announced more cost cuts and plans to invest $1.5 billion in its streaming and studio divisions.
Rocket Lab shares jumped 4.7% after the space company posted record third-quarter revenue.
Occidental Petroleum gained 3.6% after the shale producer beat third-quarter profit expectations.
U.S. bond markets were closed for a public holiday.
Advancing issues outnumbered decliners by a 1.66-to-1 ratio on the NYSE and by a 1.23-to-1 ratio on the Nasdaq.
The S&P 500 posted 14 new 52-week highs and one new low, while the Nasdaq Composite recorded 29 new highs and 52 new lows.
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