Government shutdown

Key topics include the end of the U.S. government shutdown with a short-term funding bill, but setting up future budget clashes. Disney’s Q4 results missed revenue estimates amidst streaming competition. The Supreme Court will hear arguments on Trump’s attempt to fire a Federal Reserve Governor. Concerns are rising about the legality and safety of alternative funding programs for prescription drugs. Anthropic plans a $50 billion investment in AI infrastructure, facing political backlash over energy costs. New Epstein documents referencing Trump were released.

US equities rose amid optimism for a government shutdown resolution. The Nasdaq saw its biggest gain since May, driven by AI stocks. Bitcoin surged past $105,000. SoftBank reduced its chip sector exposure, focusing on OpenAI. Paramount Skydance announced cost cuts and layoffs. Air travel faced disruptions from the shutdown, and Warren Buffett plans to accelerate charitable giving, preparing Greg Abel for succession at Berkshire Hathaway.

AI stocks rebounded Monday, led by Nvidia, Broadcom, and Microsoft, as investors focused on long-term growth despite valuation concerns. Sentiment shifted towards future earnings potential. The market anticipates a potential end to the U.S. government shutdown, further boosting optimism. However, CoreWeave’s mixed earnings highlight profitability challenges in AI infrastructure. Putin ordered accelerating rare earth metal production in Russia, which has the world’s fifth-largest reserves.

The S&P 500 and Nasdaq rallied, recovering from recent losses, driven by optimism surrounding a potential resolution to the government shutdown. Nvidia led the gains, supported by CEO Huang’s expectation of increased wafer demand. This demand highlights the importance of wafer starts as an indicator of semiconductor market health, benefiting companies like Qnity Electronics. Sector performance was broad, with consumer discretionary and materials showing strength. Attention now turns to upcoming earnings reports and developments in Washington regarding the government shutdown.

The US government shutdown, now the longest in history at 41 days, may be nearing its end. The Senate approved a procedural measure to fund the government until January, signaling bipartisan weariness. Stocks are recovering amid optimism, while PitchBook launched an AI tool for market analysis. MLB pitchers face indictment in a betting scheme. A survey reveals millionaires prioritize well-being over financial management, favoring personal trainers and therapists over wealth advisors.

Affirm CEO Max Levchin noted a slight dip in shopping interest among federal employees due to the government shutdown, though no major credit defaults were observed. This comes after Affirm reported strong Q1 earnings, exceeding expectations with a 34% revenue increase and a 42% GMV surge. Strategic partnerships with Amazon, Shopify, and Apple contribute to Affirm’s success, despite increasing competition from Klarna. Affirm raised its full-year GMV outlook to $47.5 billion, driven by growth in areas like ticketing and travel, and expanding its user base as BNPL adoption increases.

Key market developments include the Supreme Court hearing challenges to Trump’s tariffs, a shareholder vote on Elon Musk’s compensation package, and an FAA-mandated flight capacity reduction due to the government shutdown. Social media stocks show divergent performances with Snap soaring and Pinterest plummeting after earnings reports. Warner Bros. Discovery faces strategic decisions amid disappointing results, with a potential acquisition offer on the table. Finally, tariffs are impacting retailers unevenly, with prices on Amazon rising faster than competitors.

This report covers several key market trends: Amazon’s stock surge driven by AWS growth and increased capital expenditure in AI, Apple’s steady performance with moderate AI investment and strong iPhone 17 sales, and Netflix’s stock split aimed at boosting retail investor participation. The U.S. government shutdown is impacting airlines and costing billions. Chevron outperformed expectations, while Exxon Mobil’s revenue fell short. Automakers are bracing for a semiconductor shortage due to geopolitical tensions. Finally, chocolate prices have surged, impacting Halloween candy sales.

Key takeaways for investors: AWS suffered a major outage impacting numerous websites. Apple’s stock hit record highs due to strong iPhone 17 sales and AI advancements. Corporate earnings exceeded expectations, though Coca-Cola cited sluggish demand. A potential end to the government shutdown is in sight. The US and Australia deepened cooperation on rare earth materials, boosting related stocks like Cleveland-Cliffs.

The market faced pressure due to regional bank concerns tied to loan quality highlighted by JPMorgan CEO’s comments. Zions and Western Alliance saw sharp declines. U.S.-China trade tensions and Bolton’s indictment added to uncertainty. Tariffs are projected to cost businesses $1.2 trillion. Apple is reportedly pursuing Formula 1 streaming rights. EssilorLuxottica credits Meta’s smart glasses for revenue growth, while Oracle benefited from a cloud deal with Meta.