“The ADP data misses a significant portion of the overall labor market and does not provide much insight into its health,” said Jamie Cox, managing partner of Harris Financial Group.“There was such a big relief rally yesterday that the markets took a breather.”
On Monday, technology and AI stocks recovered from last week’s steep losses on expectations that the government could reopen this week, with the prolonged shutdown putting pressure on the economy and contributing to a data blackout.
The Nasdaq posted its biggest daily gain since May 27 and the S&P 500 posted its biggest single-day percentage gain since the previous session’s mid-October session. At 9:37 a.m. ET, the Dow Jones Industrial Average rose 72.81 points, or 0.16%, to 47,441.44, while the S&P 500 lost 12.76 points, or 0.19%, to 6,819.67 and the Nasdaq Composite lost 105.88 points, or 0.45%, to 23,421.61. Information technology stocks had the largest weighting on the S&P 500, down 0.6%. Gains at McDonald’s and Goldman Sachs kept the Dow Jones afloat.
Shares of Nvidia fell 2.3% after Japanese technology investor SoftBank Group announced it had sold the remainder of its shares in AI Bellwether for $5.83 billion.
Shares of Nvidia-backed CoreWeave fell 10.8% after the cloud computing company cut its annual revenue guidance.
Concerns surrounding AI-related companies that were the main drivers of this year’s bull market persisted as traders evaluated returns from technology and circular spending within the sector.
FEDERAL REOPENING AWAITS
The U.S. Senate on Monday approved a compromise that would end the shutdown that has disrupted food supplies for millions of people, left federal workers unpaid and hampered air travel.
The bill will go to the House of Representatives for approval before being sent to US President Donald Trump for his signature, with betting markets such as Polymarket having fully priced in a reopening this week.
“The shutdown will be substantially over by Thursday, and you will see a continuation of Monday’s rally once the holidays are over,” Cox added.
Meanwhile, Trump said the US would face an economic and national security disaster if the Supreme Court rules against his use of an emergency powers law to impose sweeping tariffs.
Paramount Skydance gained 8.7% to top the S&P 500 after the recently merged media company announced more cost cuts and plans to invest $1.5 billion in its streaming and studio divisions.
Shares of Rocket Lab rose 4.7% after the space company posted record third-quarter revenue.
Occidental Petroleum rose 3.6% after the shale producer beat third-quarter profit expectations.
The US bond markets were closed for a holiday.
Advancing issues outpaced declining issues by a 1.66-to-1 ratio on the NYSE and by a 1.23-to-1 ratio on the Nasdaq.
The S&P 500 posted 14 new 52-week highs and one new low, while the Nasdaq Composite posted 29 new highs and 52 new lows.
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