U.S. Market Sentiment Mixed Amid Tech Selloff and Progress Toward Ending Government Shutdown

Index Update:  U.S. stock futures fluctuated on Tuesday, pulling back after strong gains in the prior session as renewed worries over inflated AI valuations weighed on sentiment. The decline followed news that Japan’s SoftBank sold its entire $5.8 billion stake in Nvidia to fund new AI investments, sending Nvidia shares down over 1% pre-market and dragging other major tech stocks slightly lower. Meanwhile, optimism grew over an end to the record U.S. government shutdown, as the Senate passed a bipartisan funding bill to keep most federal agencies open through January 30, pending House approval and President Trump’s signature.

Market Movers:  On Monday, the top gainers were Galecto, Inc. (+248.48%), followed by Movano Inc. (+149.69%). On the contrary Katapult Holdings, Inc. (-34.45%), and Carbon Revolution Public Limited Company (-28.5%) declined the most the same day.

Commodities Update:  Crude oil prices were steady on Monday, with WTI hovering near $60 per barrel and Brent around $64, as traders awaited key supply outlooks from OPEC and the IEA amid mounting concerns of a global oil glut projected for 2026. Oil has remained under pressure this year due to rising output from both OPEC+ and non-member producers, despite plans to pause production hikes early next year. Meanwhile, President Trump claimed India halted Russian oil purchases under U.S. pressure, and Lukoil declared force majeure on shipments from Iraq. Gold climbed above $4,130, a three-week high, as U.S. economic uncertainty and weakening labor and consumer data strengthened expectations for a December Fed rate cut. While a government reopening deal eased some safe-haven demand, forecasts from JP Morgan Private Bank suggested gold could exceed $5,000 next year, driven by continued central bank buying in emerging markets.

Macro Updates:  The NFIB Small Business Optimism Index fell to 98.2 in October 2025, a six-month low, reflecting weaker sales, reduced profits, and ongoing labor shortages. According to NFIB Chief Economist Bill Dunkelberg, labor quality remains the top concern, with 32% of owners reporting unfilled job openings and 27% citing labor quality as their biggest issue—up 9 points from September. Sales performance weakened, with a net negative 13% reporting higher sales, while expectations for better business conditions dropped 3 points to a net 20%. Both actual and planned price increases also declined during the month.

Bonds Commentary:  The 10-year U.S. Treasury yield hovered above 4.1%, near last week’s five-week high, as optimism grew over an imminent end to the 41-day government shutdown and investors reassessed the Federal Reserve’s policy outlook. The Senate has already passed a temporary funding bill, with a House vote expected soon. Economic data remained mixed amid limited official releases, with private reports showing weakening labor conditions and soft consumer sentiment, offset by strong ISM Services PMI data indicating resilient business activity and rising inflation. Markets continue to anticipate a Fed rate cut in December and a halt to the balance sheet runoff at month’s end.

Futures Update:  U.S. stock futures were mostly steady on Tuesday following a strong rebound in technology shares, driven by optimism that the prolonged government shutdown may soon end. Dow futures rose 0.1%, while S&P 500 and Nasdaq futures slipped 0.2% and 0.3%, respectively. On Monday, Wall Street closed higher, with the S&P 500 up 1.5%, the Dow gaining 0.8%, and the Nasdaq surging 2.3%, led by sharp recoveries in AI-focused stocks like Nvidia and Palantir.

Stocks rallied sharply on Monday, recovering after notable weakness in the prior session. The S&P 500 incresed by 103.61 points, or 1.54%, finishing the day at 6,832.42. From a technical perspective, the index established support at key levels and steadily moved higher, indicating the possibility of further gains in the near term. Moreover, the 14-day Relative Strength Index (RSI) shifted from the mid-point and is trending upward, reflecting renewed buying momentum. Key support levels are around 6,755, with resistance anticipated near 6,900.