Wall Street Hits New Records Despite U.S. Government Shutdown

Despite the U.S. government entering its second day of shutdown, Wall Street continued to break records on Thursday, October 2. President Donald Trump has hinted at significant federal workforce cuts amid the budget impasse, while the Senate is set to vote on a funding proposal on Friday that would keep the government funded at current levels through November 21.

Following positive trends in European and Asian markets, all three major U.S. stock indexes closed at record highs by the end of the trading day, despite some intraday declines. The Dow Jones and S&P 500 had also set new records the previous day, largely driven by expectations that the Federal Reserve may cut interest rates this month.

Sam Stovall of CFRA Research noted that investors do not anticipate a swift end to the shutdown, expecting the Fed to adopt a more cautious approach and potentially reduce rates as early as October.

The shutdown is also causing delays in the release of September’s employment data, originally scheduled for Friday.

In Asia, tech stocks surged early on, with South Korea’s Kospi index rising 2.7% to a record high following chip supply deals by Samsung and SK Hynix for OpenAI’s ‘Stargate’ project. Tokyo and Hong Kong markets also saw gains, while Shanghai remained closed for holiday.

European markets continued to benefit from rising tech shares, with ASML, STMicroelectronics, and Schneider Electric gaining over 2%. Paris and Frankfurt closed with over 1% gains, while London’s FTSE index dipped slightly.

Among individual companies, Tesla shares dropped 5.1% despite a 7% increase in third-quarter deliveries, marking a continuation of recent quarterly declines. Analysts attribute increased selling pressure to the expiration of EV tax credits on September 30, though this may not have long-term effects.

Berkshire Hathaway shares fell 0.5% following the announcement of its $9.7 billion acquisition of Occidental Petroleum’s chemical unit, Oxichem, whose shares plunged 7.3% on the day.