Dow Hits Record High — But Investors Pull Back From AI Stocks
The Dow rose 1.18% to 47,927.96, the S&P 500 gained 0.22% to 6,847.36, while the Nasdaq slipped 0.25% to 23,468.30.
Quick overview
- The Dow Jones Industrial Average reached a record high, buoyed by optimism over the potential end of the U.S. government shutdown.
- The U.S. Senate has advanced a spending package to resolve the longest federal shutdown in history, with President Trump expected to sign it soon.
- Nvidia and other AI-related stocks faced losses, impacting the S&P 500 and Nasdaq despite overall market gains.
- UBS predicts a 14% earnings growth for the S&P 500 by 2026, primarily driven by the technology sector.
The Dow Jones Industrial Average notched another record high on Tuesday, lifted by optimism that the U.S. government shutdown is finally coming to an end. Still, losses in Nvidia and other AI-linked stocks capped gains for the S&P 500 and Nasdaq.
The Dow rose 1.18% to 47,927.96, the S&P 500 gained 0.22% to 6,847.36, while the Nasdaq slipped 0.25% to 23,468.30.
Shutdown Deal Nears Completion
The U.S. Senate advanced a spending package to end the 41-day federal shutdown — the longest in American history — after eight Democrats broke ranks to support the measure. The bill now moves to the Republican-controlled House, and President Donald Trump is expected to sign it within days, paving the way for a gradual reopening of government offices.
“The resolution of the shutdown, even if the reopening takes days, is a clear positive,” said one analyst, noting that it could clear the path for a long-awaited year-end rally.
Tech Stocks Under Pressure
Nvidia fell 2.9% after news that Japan’s SoftBank sold its entire stake — 32.1 million shares worth $5.83 billion — last month. The drop followed a report from MScience indicating softer chip demand and declining prices for GB200 accelerators in October.
Cloud computing firm CoreWeave plunged 16% after disclosing an operational delay from a data-center partner, overshadowing otherwise strong quarterly results and its major deals with OpenAI and Meta Platforms.
UBS Sees 14% Earnings Growth Ahead
UBS forecast that the S&P 500 could climb to 7,500 points by 2026, driven by a 14% profit expansion, with nearly half of those gains expected from tech.
While UBS expects global growth to accelerate by 2026 amid stronger sentiment and fiscal support, it warned that the coming months will bring slower activity in advanced economies as tariffs continue to pressure prices and exports.
The bank still sees U.S. equities leading global markets next year, with returns near 10%, powered by corporate earnings rather than valuation expansion.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
- Read our latest reviews on: Avatrade, Exness, HFM and XM
Save