US Stock Market Continues to Soar Amid Record Gains

U.S. stock markets are on a bullish trajectory as they approach the conclusion of another record-breaking week. The S&P 500 index has seen a rise of 0.4%, positioning it for its seventh consecutive week of gains out of the last nine weeks. The Dow Jones Industrial Average has increased by 338 points, translating to a 0.7% rise, while the Nasdaq composite has climbed 0.2%. All three major indices are coming off historic highs reached just the day before.

The bond market has shown stability in Treasury yields following mixed signals regarding U.S. business activities, particularly in sectors such as health care, real estate, and various services. The Institute for Supply Management reported a plateau in growth, whereas S&P Global indicated that growth continues, albeit at a slow pace.

The first Friday of every month typically draws attention to the U.S. government's employment report, which provides crucial data on job creation and destruction, alongside updates on the unemployment rate. This month's report is particularly significant as market participants are closely monitoring job trends, anticipating that a slowdown could lead the Federal Reserve to continue lowering interest rates. However, the ongoing government shutdown, now in its third day, is causing delays in the release of this critical data.

Historically, government shutdowns have had minimal impact on the economy and the stock market, and many analysts suggest that the current situation may be no different. This perspective remains even amid President Trump's threats of widespread layoffs of federal employees.

The excitement surrounding artificial intelligence (AI) continues to be a significant driver of the stock market's upward momentum. A recent partnership between Hitachi and OpenAI, aimed at enhancing AI capabilities, has provided additional impetus. Following this announcement, Hitachi's stock surged by 10.3% in Tokyo.

Despite the enthusiasm for AI stocks, concerns are emerging regarding the potential for a market bubble, fueled by the influx of capital into the sector. On the downside, Applied Materials experienced a 2.2% drop in its stock price after revealing that new U.S. Commerce Department regulations would result in a revenue hit of approximately $110 million in the fourth quarter.

In the energy sector, oil producers have benefitted from a slight recovery in crude oil prices, which had fallen sharply earlier in the week due to concerns over high inventory levels relative to demand. Exxon Mobil was among the top performers, rising by 1.6% and contributing to the overall strength of the S&P 500.

Internationally, stock markets displayed mixed results, with Japan's Nikkei 225 index leading gains, up by 1.9%, bolstered by Hitachi's stock performance. In the bond market, the yield on the 10-year Treasury remained stable at 4.10%, consistent with its position from the previous day.