U.S. Markets Gain Despite Shut Down Risks
Minor gains were observed across major financial markers in light of an impending potential shutdown of the U.S. government. This looming shutdown is causing investors to remain cautious, given the slowdown in the job market, the looming threat of stagflation and high stock valuations. If the shutdown goes ahead, it could potentially raise investor concerns even more.
Mike Johnson, the Speaker of the House representing the Republican Party from Louisiana, mentioned his uncertainty in regard to preventing a shutdown by the set deadline. On the other side of the issue, leading Democrats in the Congress have publicly stated that responsibility for such a government shut down would fall on the shoulders of their Republican counterparts and not their own.
September saw a disappointing fall in U.S consumer confidence, with a decrease of 3.6 points, settling at 94.2. The preceding month also witnessed a slight downtrend with a 0.9 point drop to 97.8, making the September numbers lower than anticipated.
In related financial news, the Chicago PMI slipped 0.9 points to land at 40.6 in the month of September. This was weaker than projected and marked a fifth consecutive month of decline among the last six occurrences. Similar trends were observed elsewhere in the economy as well.
There were mixed performances in the commodities market. Increases were observed in gold prices, and these gains added to the significant rise from yesterday. Contrarily, oil prices underwent a decrease undoing part of the previous day’s gains, and all eyes were set on crude numbers from API due later that day.
In a noteworthy move, President Trump initiated tariffs on imported timber, lumber and wood products. In corporate news, Exxon Mobil announced a global reduction of 2,000 jobs while CoreWeave mentioned that Meta, the social media giant, has proposed to commit up to $14.2 billion in a new order.
Amazon made headlines on Tuesday, revealing its latest additions to its hardware catalog. The unveiling included a new Fire TV line, a revamped Kindle Scribe, fresh Blink devices, an upgraded Ring with 4K camera capabilities and newly designed AI features.
Pharmaceutical giant Pfizer confirmed a deal with the U.S government aiming at reducing drug prices. In the world of ratings and stocks, Goldman Sachs downgraded music streaming service provider Spotify to ‘Neutral’. Meanwhile, fitness drink maker Celsius Holdings saw an upgrade to ‘Overweight’ by Morgan Stanley, on account of growth acceleration.
Bank of America responded by downgrading Oklo and NuScale Power to ‘Neutral’ and ‘Underperform’ respectively. BTIG too downgraded grocery delivery service Instacart to ‘Neutral’ citing unfolding competitive difficulties. Evercore ISI initiated coverage of CoreWeave, expressing a bullish perspective.
Fintech company Robinhood disclosed its plans to explore launching its prediction markets outside of the U.S. Also, it was revealed that Berkshire is nearing a deal to acquire a petrochemical unit from Occidental at a price close to $10 billion.
GM and Ford are initiating programs to boost the viability of electric vehicle leases by extending the availability of a $7,500 U.S. tax credit. On the legal front, YouTube settled a 2021 lawsuit filed by President Trump for $24.5 million over the suspension of his account post-January 6, 2021.
Boeing, the aviation giant, is reported to be developing a single-aisle airplane as a successor to the 737 MAX as part of its strategy to regain business lost due to sustained quality and safety issues. Their main target remains Airbus, an aggressive competition in the industry.
In other corporate news, AnaptysBio gained traction as it announced a split into two publicly traded entities. Wolfspeed saw an increase after it finalized its financial restructuring process and successfully emerged from Chapter 11. Robo.ai, a tech startup, gained in the New York market after receiving a commitment of $300 million investment from a consortium led by Burkhan Capital.
FireFly Aerospace has experienced a downturn following the loss of their Alpha Flight 7 rocket during an event. A lawsuit by FTC against Zillow and Redfin led to a decline for both companies as well as Rocket Companies. Despite the mixed updates, the Dow gained 81.82 points or 0.18%, Nasdaq rose by 68.86 points or 0.3%, and the S&P 500 advanced by 27.25 points or 0.41%.