Traders work at the New York Stock Exchange on Oct. 1, 2025.
NYSE
Stock futures rose Friday after the market recorded new highs in the previous session, driven by strength in the artificial intelligence trade that appeared to overpower concerns about the U.S. government shutdown.
Futures tied to the Dow Jones Industrial Average rose 128 points, or 0.3%. S&P 500 and Nasdaq 100 futures also gained 0.3% each.
The three major U.S. indexes climbed to record levels on Thursday, buoyed by gains in Nvidia, which also hit an all-time high.
The government shutdown, which entered its third day on Friday, has exacerbated investors’ underlying concerns this year about macroeconomic and policy headwinds, inflation risks and a slowing labor market. Investors are waiting to see how long the shutdown will persist to gauge the seriousness of its economic repercussions. To be sure, shutdowns have not been market-moving events in the past.
“[Thursday’s] market moves suggest that the history of govt shutdowns still holds sway,” Paul Christopher, head of global investment strategy at Wells Fargo Investment Institute, wrote in a note. “These events have modest negative economic impacts as they occur, but the eventual reopening of the federal bureaucracy erases those nicks to the economy.”
On Thursday, Treasury Secretary Scott Bessent told CNBC that the current lapse in government funding could lead to “a hit to the GDP, a hit to growth and a hit to working America.”
President Donald Trump has threatened massive layoffs, which have stoked ongoing concerns about the jobs market. On Thursday, he said the Democrats have given him an “unprecedented opportunity” to cut federal agencies. The Congressional Budget Office estimates 750,000 federal workers will be furloughed each day.
The shutdown also has led to an economic data blackout. The Labor Department’s pause on virtually all activity has blocked the Friday release of the September nonfarm payrolls report, lessening the amount of economic data the Federal Reserve can factor into its interest rate decision at its October meeting. However, it also removes a factor that could lend pressure to stocks.
The shutdown began after Congress failed Tuesday to reach an agreement on government funding. Top Democrats have stayed firm on their demands to to pass a spending bill that would extend health care tax credits for millions of Americans, leading to retaliation from Trump and top Republicans.
Despite the rancor, stocks are tracking for a winning week. The S&P 500 is up nearly 1.1% week to date, while the 30-stock Dow has added 0.6% and the Nasdaq has climbed 1.6%.
“Bottom line: Sentiment jumped higher driven by an AI fervor that is seemingly ever increasing. Slowdown fears and “bubble” worries are rapidly being replaced by the Fear Of Missing Out. Fed cuts fell off investors’ minds while momentum trading (which is now long AI) is gaining steam,” wrote Goldman Sachs’ trading desk.