Wall Street wrapped up a great week on a high note. The Dow Jones and S&P 500 hit new all-time highs on Friday, even as a partial US government shutdown dragged into its third day. Investors stayed upbeat, thanks to strong hopes for interest rate cuts from the Federal Reserve soon.
The Dow Jones climbed 242 points, or 0.52%, to close at 46,761.72. The S&P 500 edged up just 0.01% to 6,715.82, another record. But the Nasdaq dipped 0.28%, or 63 points, to 22,780.86. Big tech stocks like Applied Materials and Tesla pulled it down. Applied Materials warned of a $600 million hit to its 2026 earnings from chip gear issues.
Fresh data from the Institute for Supply Management showed US services jobs shrinking for a fourth month straight. That fueled bets on more Fed rate cuts. Mona Mahajan from Edward Jones told Reuters the mood is positive. “The chance of a rate cut has gone up since the shutdown started,” she said. Weak job numbers this week add to it.
The shutdown hasn’t hurt markets much yet. But Anthony Saglimbene at Ameriprise Financial warned it could if it lasts. “Longer delays mean messy data collection,” he said. That might confuse future reports.
Over in Europe, stocks had their best week in five months. The STOXX 600 rose 0.5% Friday and 2.8% for the week, hitting a third straight record close. Health care led with a 1.3% gain, thanks to AstraZeneca up 1.6% and Novo Nordisk up 2.1%. Banks gained 1%, with Raiffeisen jumping 7.4% on news the EU might ease sanctions on a Russian tycoon to help the Austrian bank. Basic resources, like miners, rose 1.7% as metal prices climbed.
UBS analysts see good times ahead for health stocks, even with US drug deal questions. Europe’s STOXX is up 12.4% this year, closing in on the S&P 500’s 14.7% gain. Rate cut buzz and strong sectors are pulling it along.
Markets love these wins, but the shutdown adds some worry. Still, with Fed hopes high, next week could stay bright.