US Markets Hover Near Records Amid Tech Gains Despite Government Shutdown

U.S. stock markets are maintaining their positions near record highs as technology stocks continue to experience upward momentum, all while Wall Street appears largely unaffected by the ongoing government shutdown. The S&P 500 index saw a 0.3% increase, building on its most recent all-time high. Similarly, the Dow Jones Industrial Average rose by 78 points, or 0.2%, shortly after the market opened at 9:35 a.m. Eastern time, and the Nasdaq composite climbed by 0.5%, edging closer to its own record.

Typically, Thursdays are characterized by investor reactions to the latest weekly data concerning unemployment benefit applications in the U.S. However, the current government shutdown has resulted in a delay of this week's report on jobless claims. An even more significant report, which is scheduled for release on Friday, detailing the monthly job creation and losses within the economy, is also expected to be postponed. This uncertainty is particularly notable as investors are hoping for a specific moderation in the job market--enough to persuade the Federal Reserve to continue reducing interest rates, but not so much that it triggers a recession.

Despite the delays in economic data, the U.S. stock market has thus far remained resilient. Historical patterns indicate that government shutdowns have had limited adverse effects on both the economy and the stock market. Analysts speculate that the current shutdown could follow a similar trend, although President Donald Trump has warned of potential large-scale layoffs of federal employees during this period.

The focus for traders today has shifted to corporate announcements, which have become the primary catalysts for market movements. Stocks within the semiconductor and artificial intelligence sectors have surged following OpenAI's announcement of partnerships with South Korean firms for a significant $500 billion initiative aimed at developing AI infrastructure. In Seoul, shares of Samsung Electronics rose by 3.5%, while SK Hynix saw a remarkable increase of 9.9%. This news also had a positive ripple effect in the U.S. market, with Advanced Micro Devices gaining 3.5% and Broadcom increasing by 2.5%. Additionally, Taiwan Semiconductor Manufacturing Co., a prominent chip manufacturer, experienced a stock rise of 1.2% in U.S. trading.

The excitement surrounding artificial intelligence and the extensive investments being made in the sector have contributed significantly to the record-setting trajectory of the U.S. stock market, alongside expectations for more accommodative interest rates. However, the rapid growth in AI stocks has led to growing concerns regarding the potential for a market bubble that could disappoint investors in the future. In contrast, Occidental Petroleum's stock declined by 2.3% after the company announced its decision to sell its chemical division, OxyChem, to Berkshire Hathaway for $9.7 billion in cash, which could mark the last major acquisition under Warren Buffett's leadership.

In other notable movements, shares of Fair Isaac surged 22.2% following the launch of a program that enables mortgage lenders to access and distribute FICO credit scores directly to consumers, effectively bypassing major credit bureaus such as TransUnion, Equifax, and Experian. In response, TransUnion's stock fell by 11.9%, Equifax saw a decline of 10.2%, and Experian's shares decreased by 3.6% in London.

In international markets, London's FTSE 100 experienced a slight decline of less than 0.1%, while other European and Asian indexes showed stronger performance, with South Korea's Kospi rising by 2.7% following the substantial gains for Samsung Electronics and SK Hynix. In the bond market, the yield on the 10-year Treasury note dipped to 4.11% from 4.12% late Wednesday.