Despite the U.S. federal government shutdown (temporary work stoppage), the New York stock market, which had been rising for days, ended mixed.
On the 3rd (U.S. Eastern time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average rose 238.56 points (0.51%) from the previous session to close at 46,758.28. The Standard & Poor's (S&P) 500 index inched up 0.44 point (0.01%) to 6,715.79, while the Nasdaq composite fell 63.54 points (0.28%) to 22,780.51 at the close.
As the shutdown continued, the September nonfarm payrolls report scheduled for the day was delayed. That is because the Bureau of Labor Statistics (BLS) at the Labor Department and the Bureau of Economic Analysis (BEA) at the Commerce Department, which compile key economic indicators, also halt operations during a shutdown.
The main basis for the U.S. Federal Reserve (Fed) resuming its rate-cutting stance last month was a cooling labor market. If the release of employment indicators is delayed, the policy decision risk for the Fed increases accordingly, and such risk can flow back into the market.
Investors took profits mainly in AI and semiconductor-related stocks, which had posted sharp gains this week. Although large-scale capital expenditure plans in the AI industry are being announced one after another, anxiety over a bubble appears to have grown.
By sector, health care and utilities rose more than 1%. Among mega-cap technology companies with market capitalizations above $1 trillion, Amazon, Meta Platforms, and Tesla fell around 2%. Nvidia was slightly lower on news that it has been unable to smoothly supply graphics processing units (GPUs) to the United Arab Emirates (UAE). The U.S. Commerce Department was reported to be pressuring the UAE to prioritize investment as promised if it wants to receive Nvidia's chips.
Palantir tumbled more than 7%. Investor sentiment worsened after a U.S. military memo said that the battlefield communications systems of AI defense contractors such as Palantir and Anduril have numerous errors and are highly risky. Quantum computing corporations were strong again on the day. Rigetti Computing jumped more than 13%, and Quantum Computing rose 7%.
U.S. services activity in September weakened from the prior month, standing at the border between expansion and contraction. The Institute for Supply Management (ISM) said the September services purchasing managers index (PMI) came in at 50.0. That is down 2.0 points from 52.0 in August, failing to remain in expansion territory. It also missed the market consensus of 51.7.
The final September services PMI from S&P Global registered 54.2, beating the market expectation of 53.9. According to the CME FedWatch tool at the Chicago Mercantile Exchange (CME), futures pricing put the probability of a 50-basis-point cut in the benchmark rate by December at 85.1%, down from 90.0% near the previous close. The CBOE Volatility Index (VIX) stood at 16.65, up 0.02 point (0.12%) from the previous session.