Stock market today: Dow shruggs off likely government shutdown to hit record high

Investing.com -- The Dow closed at a record high Tuesday, as investors shrugged off growing signs that the government was headed for a shutdown this week, which could delay the release of key labor data. 

At 4:00 p.m. ET (20:00 GMT), the Dow Jones Industrial Average rose 0.2% to a closing record of 46,397.83. The S&P 500 index rose 0.4%, and the NASDAQ Composite added 0.3%.

The main averages on Wall Street remain near all-time highs and are on course for to register a positive September on bets that the Federal Reserve will continue to slash interest rates this year, coupled with soaring enthusiasm around artificial intelligence.

The S&P 500 has increased more than 3% this month, the Dow Jones Industrial Average has gained 1.7%, while the tech-heavy Nasdaq Composite has outperformed with a more than 5% gain.

U.S. headed for a shutdown  

The U.S. government will enter a shutdown if Congress fails to extend funding beyond Tuesday.

Vice President JD Vance told reporters on Monday this scenario appeared to be likely after talks between President Donald Trump and bipartisan leaders marked little progress. 

The current political impasse is centered around disagreements over healthcare spending and social welfare programs. While the Republicans do hold a 53-seat majority in the Senate, they still need 60 votes to advance a proposed spending bill. 

Shutdowns have historically had little impact on corporate earnings. But they still tend to disrupt economic activity. The last time the government was shut down was for a period of 35 days in late-2018 to early-2019. 

The Congressional Budget Office estimated the shutdown reduced gross domestic product by about $11 billion.

A shutdown this week could delay the release of September’s nonfarm payrolls data, which is due on Friday, and widely followed as a guide to potential future Federal Reserve rate cuts. 

August JOLTS job openings data clombed to 7.2M from 7.21M a month earlier, beating forecast of 7.19M.

More tariffs on the way 

Along with the uncertainty surrounding a possible government shutdown, investors are also having to cope with a new wave of trade-related headlines.

Trump has set tariffs on the import of lumber, furniture, and kitchen fittings with the intent of promoting local production and reducing reliance on imports.

In a proclamation on Monday, the president imposed a 10% tariff on imports of softwood lumber and timber, a 25% tariff on imports of kitchen cabinets and vanities, and a 25% tariff on upholstered wooden products.

The tariffs will take effect from October 14, Trump said. The levies are based on the findings of a Commerce Department investigation into lumber and furniture imports, which Trump had ordered earlier this year.

Pfizer Inc (NYSE:PFE), meanwhile, is set to announce an agreement to lower Medicaid drug prices and would receive a three-year reprieve from pharma tariffs amid plans for expanding its U.S. manufacturing footprint.  

AI stocks continue to rebound

AI stocks continued to rebound following their recent, with CoreWeave Inc (NASDAQ:CRWV) rising 12% after striking a $14.2 billion deal to supply Mea with AI cloud hardware. 

Nvidia Corporation (NASDAQ:NVDA) added to gains from a day earlier, rising more than 2% as investors continued to buy the dip in chipmaker.

Peter Nurse, Ambar Warrick contributed to this article