U.S. stocks made notable gains, culminating in record highs for Wall Street as the S&P 500 and Dow Jones Industrial Average continued their upward trajectory. On Friday, October 6, 2023, the S&P 500 edged up by less than 0.1%, marking its seventh winning week in the last nine. The Dow Jones Industrial Average climbed 0.5%, both indices adding to the all-time highs achieved just the day before. In contrast, the Nasdaq Composite experienced a slight decline, falling 0.3% from its record.
The bond market reflected a mixed sentiment, as Treasury yields increased following varying reports on the growth of U.S. services sectors. Crude oil prices also saw a recovery after earlier losses, a response to concerns over high inventory levels in relation to demand.
Market Trends and Economic Indicators
As Wall Street approached the close of another week, the S&P 500 had risen by 0.1%, positioning itself for its seventh consecutive week of gains. By mid-afternoon, the Dow Jones Industrial Average had surged by 298 points, equating to an increase of 0.7%. Meanwhile, the Nasdaq Composite, which initially gained ground, slipped 0.3%.
Investors were particularly attentive to reports from the Institute for Supply Management, which indicated that growth in the U.S. services sector was stalling. Contrastingly, a report from S&P Global suggested continued, albeit slow, growth. The first Friday of each month typically draws attention to the U.S. government’s jobs report, detailing employment changes and the unemployment rate. This month’s release, however, was delayed due to a government shutdown that has now persisted for over three days. Historically, such shutdowns have had minimal impact on the economy or stock market, and there is speculation that this instance will follow suit.
The ongoing uncertainty surrounding the job market is crucial as many investors anticipate that a slowing job market could lead the Federal Reserve to continue cutting interest rates. Despite the government shutdown, market participants appeared unfazed, overlooking delays in reports on unemployment claims.
Sector Performances and Notable Stocks
Excitement surrounding advancements in artificial intelligence has emerged as a significant driving force for the U.S. stock market. Recent collaborations, including a memorandum of understanding between Japan’s Hitachi and OpenAI, contributed to positive sentiment in the sector, with Hitachi’s stock rising by 10.3% in Tokyo. This followed announcements from OpenAI regarding partnerships with various South Korean companies.
Nevertheless, concerns about a potential bubble in AI stocks continue to surface, as the influx of capital into the industry raises questions about sustainability. On the downside, shares of Applied Materials fell by 2.3% after the company announced an anticipated revenue hit of approximately $110 million for the fourth quarter due to new export restrictions imposed by the U.S. Commerce Department on specific customers in China.
Meanwhile, oil producers benefitted from a rebound in crude prices, recovering some losses from earlier in the week. Exxon Mobil rose by 2%, contributing to the S&P 500’s upward momentum.
Internationally, stock markets exhibited mixed performance, with Japan’s Nikkei 225 rising by 1.9%, bolstered by Hitachi’s stock increase. In the bond market, the yield on the 10-year Treasury note saw a slight rise to 4.12% from 4.10% the previous day.
As the week concluded, Wall Street demonstrated resilience, fueled by optimism in several sectors despite economic uncertainties and external pressures.
