The U.S. stock market inched upward Wednesday, approaching record levels. The S&P 500 rose 0.2%, nearing the all-time high set a few weeks ago. The Dow Jones Industrial Average added 127 points after hitting its own record the previous day, while the Nasdaq composite gained 0.3%. Technology stocks led the rebound, with Advanced Micro Devices (NASDAQ:AMD) rallying after its CEO forecasted more than 35% annual compounded revenue growth over the next three to five years. Nvidia (NASDAQ:NVDA), the dominant chipmaker for artificial intelligence technology, also rose.
Market Optimism Grows as Shutdown Nears End
Wall Street opened higher as optimism mounted that the longest federal government shutdown in U.S. history could end soon. Futures for the S&P 500 rose 0.4%, Dow futures climbed 0.3%, and Nasdaq futures jumped 0.6%, suggesting investors are regaining confidence.
The shutdown, which began on October 1, left over a million federal workers unpaid, disrupted thousands of flights, and interrupted food aid programs. The Congressional Budget Office estimated that a six-week closure could reduce fourth-quarter economic growth by 1.5 percentage points.
Additionally, missing economic data on unemployment, inflation, and retail spending complicates the Federal Reserve’s efforts to monitor the economy. Fed Chair Jerome Powell noted the rate-setting committee is divided on a potential interest-rate cut in December, partly due to uncertainty in economic signals.
Tech Stocks Lead U.S. Stock Market Gains
The technology sector stabilized after recent volatility. Nvidia (NASDAQ:NVDA), which has risen 44% this year, experienced a 5% dip during the past week. Meanwhile, CoreWeave, an AI partner of Nvidia, fell 17% after disappointing investor expectations, despite being up 3% early Wednesday following its March IPO.
Advanced Micro Devices (NASDAQ:AMD), whose shares have doubled this year, rose 5% overnight on forecasts of substantial revenue growth in its AI-driven data center business. The strong performance of these AI-focused companies continues to propel the U.S. stock market, even amid broader economic uncertainties.
The craze for AI stocks is a major factor behind recent market records. Despite a slowing job market and high inflation, investor enthusiasm for tech has pushed valuations higher, though some critics compare the frenzy to the 2000 dot-com bubble.
Global Market Performance
Internationally, European markets showed mixed gains. France’s CAC 40 and Germany’s DAX each climbed 1.2%, while Britain’s FTSE 100 remained unchanged.
In Asia, Japan’s Nikkei 225 rose 0.4% to 51,063.31. Hong Kong’s Hang Seng gained 0.9% to 26,922.73, and the Shanghai Composite fell slightly to 4,000.14. South Korea’s Kospi jumped 1.1% to 4,150.39, while Australia’s S&P/ASX 200 declined 0.2% to 8,799.50.
Energy markets showed minor declines. U.S. crude dropped 65 cents to $60.39 per barrel, and Brent crude fell 66 cents to $64.50 per barrel, reflecting subdued global demand.
Conclusion
The U.S. stock market continues to edge higher, driven by AI-focused tech stocks like Nvidia (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD), while easing government shutdown concerns support investor sentiment. Despite volatility and mixed global performance, the market appears poised to challenge record levels as optimism in technology growth and economic stabilization persists.
The U.S. stock market faces a delicate balancing act. While AI-driven companies like Nvidia (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD) continue to push indexes higher, investors are increasingly cautious about lofty valuations. Analysts warn that even strong earnings might not prevent short-term pullbacks if broader economic indicators signal slower growth. At the same time, optimism around an imminent end to the government shutdown is fueling trading momentum, as federal workers return to their posts and disrupted services resume. For market watchers, the key question remains whether technology stocks can sustain their recent gains or if profit-taking will temper the rally in the coming weeks.
Featured Image – Freepik
