Stock market today: S&P 500 falls as government shutdown, trade jitters persist
Investing.com -- The S&P 500 climbed to another record closing high Monday, as investors continued to pile into big tech, with Nvidia and Apple leading to the upside amid AI optimism and expectations for strong iPhone demand, respectively.
At 4:00 p.m. ET (20:00 GMT), the Dow Jones Industrial Average rose 66 points, or 0.1%, the S&P 500 index climbed 9.5%, hitting a record high of 6,692.59, and the NASDAQ Composite added 0.7%.
Nvidia jumps on OpenAI deal, Apple gets price hike from Wedbush
NVIDIA Corporation (NASDAQ:NVDA) jumped more than 3% after the chipmaker said it plans to invest up to $100 billion in OpenAI as apart of a move to build 10 gigawatts of capacity over several years.
Apple Inc (NASDAQ:AAPL), meanwhile, hit a eight-month highs after Wedbush lifted its price target on the stock to street high of $310 from $270, citing optimism over iPhone demand.
"We believe that iPhone 17 pre-orders will be up 5-10% vs. last year," Wedbush said, estimating roughly 20% of the 1.5 billion users worldwide that haven’t upgraded their phones over the past 4 years will likely to so.
Fed speakers pour cold water on further cuts
A trio of Fed speakers cooled expectations for further cuts, citing inflation still running above the central bank’s target.
Atlanta Fed President Raphael Bostic said Monday he sees not need for further cuts this year as inflation remains a concern.
"I am concerned about the inflation that has been too high for a long time," Bostic told The Wall Street Journal. "And so I today would not be moving or in favor of it, but we’ll see what happens,” he added, referring to interest rates.
St. Louis Fed President Alberto Musalem echoed this cautious view, describing the recent cut as a “precautionary move” to support the labor market but warning of “limited room for easing further without policy becoming overly accommodative.”
Cleveland Fed President Beth Hammack, meanwhile, called for a “cautious” approach to further cuts, citing worries about elevated inflation despite the labor market’s resilience.
In the chorus of caution on further rate cuts, newly appointed Fed Governor Stephen Miran continued to stress the need for deeper cuts.
The slew of fed speaks comes ahead of a speech by Chair Jerome Powell on Tuesday, and top-tier economic data including an inflation report due later this week.
There are also a host of key U.S. economic readings due this week, including purchasing managers index data for September, a final reading of second-quarter gross domestic product growth, and most importantly PCE price index data– the Fed’s preferred inflation gauge– at the end of the week.
Core PCE inflation is expected to remain largely above the Fed’s 2% annual target, while the focus will be on any signs of higher inflation from increased trade tariffs.
Goldman lifts S&P 500 forecasts
Goldman Sachs has raised its S&P 500 forecasts, saying robust earnings growth should drive further gains even as valuations remain elevated.
The bank now expects the index to reach 6800 by year-end, 7000 in six months, and 7200 over the next 12 months, implying returns of 2%, 5%, and 8% respectively from Friday’s 6664.36 close. The revision reflects Goldman rolling forward its 3-, 6- and 12-month return forecasts.
Earnings growth is seen as the key driver. Goldman projects S&P 500 EPS to rise 7% in both 2025 and 2026, with earnings accounting for the majority of this year’s 14% total return.
“With long-term interest rates relatively stable, earnings should remain the primary driver of equity upside going forward,” Goldman strategists led by David Kostin said in a note.
RBC Capital has also taken a positive stance, adding that S&P 500 could exceed its 7,100 target for the second half of 2026 if historical patterns after Federal Reserve cuts hold true.
RBC highlighted that “reset cuts (those after a long pause within a cutting cycle) have a median 12-month-forward return of 13%, while non-recession cuts tend to have a median 12-month-forward return of 21%.”
The firm said this “highlights upside risk to our 7,100 2H26 S&P 500 price target.”
Micron leads earnings slate
There are more tech earnings to digest this week, with the results likely to provide some updated insight into the state of a boom in enthusiasm around artificial intelligence.
On Tuesday, Micron Technology (NASDAQ:MU) is due to report after the closing bell. Sentiment has been upbeat around the chipmaker, especially in the wake of blockbuster returns from peers like Broadcom (NASDAQ:AVGO) and Oracle (NYSE:ORCL) as well as a range of favorable sell-side preview notes, analysts at Vital Knowledge said.
Electronics component manufacturer and Apple-supplier Jabil Circuit (NYSE:JBL), which has been betting heavily that the data centers powering AI will fuel strong infrastructure services demand, will post quarterly earnings on Thursday. Consulting giant Accenture (NYSE:ACN) is set to unveil results on the same day, although analysts have flagged worries around the impact of AI on its business.
The tech sector is also having to digest the introduction of a new visa fee by the Trump administration.
On Friday, the White House announced that it would ask firms to pay $100,000 per year for H-1B working visas, leading a host of businesses -- such as Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL) and Goldman Sachs (NYSE:GS) -- to advise workers not to leave the U.S. or return to the country immediately.
Elsewhere, Kenvue (NYSE:KVUE) stock fell following a Washington Post report indicating that the Trump administration plans to announce that pregnant women’s use of its Tylenol drug is potentially linked to autism.
Fox (NASDAQ:FOX) stock rose after President Donald Trump said in an interview on Sunday that Rupert Murdoch and his son Lachlan are likely to be involved in the deal to save TikTok in the United States.
Snap (NYSE:SNAP) stock soared after the parent company of social media platform Snapchat confirmed its plan to release consumer-ready Spectacles in 2026.
Gold hits new record high
Gold prices touched a new record peak on Monday, as the prospect of more U.S. interest rate cuts after the Fed’s recent borrowing cost drawdown supported the outlook for bullion.
Gold futures rose 1.4% to $3,771.60/oz.
Lower rates bode well for non-yielding assets such as the yellow metal, given that they lower the opportunity cost of investing in the sector. Broader metal prices have also advanced after the Fed’s cut.
Oil prices fell, handing back earlier gains that resulted from rising geopolitical tension in the Middle East as well as the potential impact of fresh European Union measures aimed at curbing Russia’s energy revenues.
Peter Nurse, Ambar Warrick contributed to this article