Wall Street: Nasdaq Tops 23,000 for the First Time
The Dow Jones Industrial Average was little changed at 46,601.78, while the S&P 500 gained 0.6% to 6,754, and the Nasdaq reached new highs.
Quick overview
- With a potential U.S. government shutdown looming, investors are seeking clarity on interest rates amid delayed economic data.
- U.S. stocks closed higher, with the S&P 500 and Nasdaq reaching record highs, driven by strong performances from tech companies like AMD.
- Federal Reserve minutes indicated a consensus for more rate cuts this year due to signs of labor market weakness.
- Goldman Sachs noted that while the market shows bubble-like signs, the current tech rally is supported by fundamentals rather than speculation.
With just a week left before a potential U.S. government shutdown, investors looked for more clues on the interest rate outlook amid the absence of key economic data on jobs and inflation.
U.S. stocks closed higher on Wednesday, with the S&P 500 and Nasdaq Composite reaching fresh record highs thanks to strong performances from tech giants, particularly AMD. The Dow Jones Industrial Average was little changed at 46,601.78, while the S&P 500 gained 0.6% to 6,754.83, and the Nasdaq Composite climbed 1.1% to 23,043.38
Government Shutdown Delays Economic Data
The ongoing federal shutdown has delayed several key U.S. economic reports, forcing traders to rely on private indicators. A New York Fed survey earlier this week showed weakening expectations for growth and rising inflation forecasts, weighing on market sentiment before today’s rebound.
Fed Minutes Point to More Rate Cuts
Minutes from the September 16–17 Federal Reserve meeting, released Wednesday, showed most policymakers favored additional rate cuts this year amid signs of labor market weakness. The FOMC voted to lower its benchmark rate to 4.00–4.25%, marking the first cut in nine months.
“Most participants noted that moving toward a more neutral policy stance was appropriate,” the minutes said, citing reduced upside risks to inflation.
Tech Stocks Lead the Charge
NVIDIA rose 2.2% after CEO Jensen Huang told CNBC that computing demand had “increased substantially” in the past six months and expressed enthusiasm about investing further in Elon Musk’s xAI, which Bloomberg reported is seeking a $20 billion valuation.
Penguin Solutions plunged 16% after missing revenue estimates, while Warner Bros. Discovery fell 3.8% amid reports that Skydance Media’s David Ellison is exploring a $60 billion takeover. Critical Metals Corp. jumped 17.6% on a new supply deal, while Envoy Medical dropped 41.5% after announcing a share offering.
Cisco gained 1.9% and Broadcom rose 2.7% after Cisco unveiled new AI data center chips directly challenging its rival.
Goldman Sachs: Not a Bubble—Yet
In a note to clients, Goldman Sachs said the market shows “signs reminiscent of past bubbles” but argued that the current rally—especially in tech—is driven by fundamentals rather than irrational speculation.
“While valuations are stretched,” the bank said, “they’re not yet consistent with historical bubble levels. Still, high market concentration and fierce AI competition mean investors should stay diversified.”
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