U.S. Markets Start the Week Higher Amid AI Optimism and Ongoing Government Shutdown

Image Source : Krish Capital Pty Ltd

Index Update:  On Monday, the S&P 500 up 0.4%, Nasdaq 100 up 0.8%, and Dow futures gaining about 100 points, driven by optimism over AI-related partnerships. AMD shares surged over 22% premarket after striking a deal with OpenAI to supply 6 gigawatts of GPUs and granting a warrant for up to 160 million shares. Major tech stocks were mostly higher, though Nvidia and Broadcom slipped. Meanwhile, the U.S. government shutdown entered its sixth day, with the Senate set to vote again on competing funding bills, though a resolution remains unlikely.

Market Movers:  On Friday, the top gainers were Epsium Enterprise Limited (+78.58%), followed by Alto Neuroscience, Inc. (+56.24%). On the contrary Black Titan Corp (-61.43%), and American Rebel Holdings, Inc. (-43.72%) declined the most the same day.

Commodities Update:  Oil prices climbed nearly 2% on Monday, with WTI at $61.9 and Brent at $65.6 per barrel, after OPEC+ agreed to a modest 137,000 bpd production increase for November, mirroring October’s rise. The move was seen as cautious, aimed at balancing market stability amid ongoing oversupply concerns. OPEC+ said the decision reflected a steady global outlook and healthy fundamentals, though it left room to pause or reverse adjustments if needed. Gains were tempered by fears that the prolonged U.S. government shutdown could slow economic activity and reduce energy demand. Gold prices soared past $3,900 per ounce to a record high as investors sought safety amid escalating concerns over the U.S. government shutdown, which has delayed key economic data. With the labor market showing signs of weakness and rate cuts widely expected, markets are pricing in a 95% chance of a 25 bps cut in October and an 84% chance in December. The metal’s nearly 50% surge this year has been driven by uncertainty, central bank buying, and strong ETF inflows.

Macro Updates:  The U.S. dollar index climbed to 98.4, nearing August highs, as political turmoil in Europe and Japan weakened the euro and yen. The euro fell after another French Prime Minister’s resignation raised fiscal stability concerns, while the yen slid following Sanae Takaichi’s election as Japan’s ruling party leader, fueling expectations of new fiscal stimulus. Meanwhile, the U.S. government shutdown entered its sixth day, with the Senate set to vote again on competing funding bills to reopen the government.

Bonds Commentary:  The U.S. 10-year Treasury yield rose to 4.16%, its highest in over a week, amid rising global borrowing costs and ongoing political uncertainty. Markets are watching the sixth day of the U.S. government shutdown, which has delayed key economic data, while President Trump’s threat to fire federal workers added tension. Despite signs of a softer labor market and moderating demand, growth concerns remain limited. Investors now await comments from Fed officials and the upcoming FOMC minutes for policy guidance.

Futures Update:  U.S. stock futures rose on Monday, with the Dow up 0.2%, S&P 500 up 0.3%, and Nasdaq 100 up 0.4%, as investors monitored the ongoing federal government shutdown and its impact on delayed economic data ahead of the Federal Reserve’s upcoming rate decision. Concerns grew over possible federal layoffs amid limited progress toward a bipartisan deal, while markets also looked ahead to the start of third-quarter earnings season and Constellation Brands’ results.

After trending mostly higher over the past few sessions, stocks initially rallied further in early trading on Friday but retreated later in the day. The S&P 500 gained less than a tenth of a percent, closing at 6,715.78. From a technical standpoint, the index held support at important levels and maintained an upward trajectory, indicating the potential for further gains in the near term. Additionally, the 14-day Relative Strength Index (RSI) is moving higher, supporting a bullish outlook. Key support levels are around 6,695, with resistance expected near 6,810.