Nasdaq’s Worst Week in 7 Months Shakes Wall Street
Despite limited data availability due to the shutdown, analysts increasingly believe the Federal Reserve is likely to cut interest rates.
Quick overview
- Wall Street ended mixed on Friday, with the Dow Jones rising 0.2% and the Nasdaq slipping 0.2% amid volatile trading.
- Consumer confidence in the U.S. fell to its lowest level since mid-2022, driven by concerns over the ongoing government shutdown.
- Layoffs surged by 183% in October, marking the largest monthly increase in decades, while private-sector job growth showed some recovery.
- Analysts anticipate that the Federal Reserve may cut interest rates in December due to the economic impact of the shutdown.
The losses narrowed sharply by the end of the session after reports of progress in congressional negotiations to end what has become the longest U.S. government shutdown in history.
Wall Street ended mixed on Friday after a volatile session that saw sharp early losses. For the week, however, the Nasdaq logged its steepest decline since late March, weighed down by renewed concerns over a potential AI-driven market bubble.
The Dow Jones Industrial Average rose 0.2% to 46,987.07, the S&P 500 edged up 0.1% to 6,724.46, while the Nasdaq Composite slipped 0.2% to 23,004.54.
Economic jitters resurface
Consumer confidence in the U.S. dropped in November to its lowest level since mid-2022, while one-year inflation expectations ticked higher amid growing anxiety over the 38-day federal shutdown.
According to the University of Michigan’s survey, the consumer sentiment index fell to 50.3 from 53.6 in October—well below economists’ forecasts. The extended shutdown has heightened worries about lost income, reduced benefits, and broader economic fallout.
Meanwhile, fresh data added to the mixed picture for the labor market. Challenger, Gray & Christmas reported a 183% surge in layoffs in October—the largest monthly jump in decades. Bank of America Institute figures suggested some cooling since spring, though not a sharp slowdown since September.
On a slightly brighter note, ADP data showed private-sector employers added 42,000 jobs in October, recovering from a revised loss the prior month.
Despite limited data availability due to the shutdown, analysts increasingly believe the Federal Reserve is likely to cut interest rates in December.
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