The federal government shutdown, now on its third day, has disrupted the flow of crucial economic reports, including the much-anticipated nonfarm payrolls data, postponed like a flight delayed by "technical difficulties". Without their usual dashboard, investors have been forced to read the economy through secondary indicators, which currently suggest a softening labor market. That, in turn, has kept the dream of cheaper borrowing alive.

Meanwhile, Wall Street's major indices have been breaking their own records with the frequency of a pop song chorus. The S&P 500 has now closed at a new high for the thirtieth time this year. At this point, one wonders whether the term "record" still means what it used to.

But even as futures climb, there are faint cracks in this confident façade. Traders have been quick to lock in gains during intraday dips. I can't help but sense that this is less a stampede toward euphoria than a cautious shuffle:  everyone's watching everyone else, trying to decide whether the party is just beginning or already running out of champagne.

The economic calendar later today carries more weight than usual. With the payrolls report missing in action, investors will be scrutinizing the Institute for Supply Management's non-manufacturing PMI and the final S&P Global services and composite PMIs for September. These reports, ordinarily the supporting cast, are suddenly headliners.

Federal Reserve officials are out in force. New York Fed President John Williams spoke of strategizing for "unpredictable change". Later in the day, Dallas Fed President Lorie Logan and Fed Vice Chair Philip Jefferson are scheduled to offer their own takes on the economic outlook. Their speeches will be parsed for clues the way medieval scholars pored over scripture.

Two stories have dominated both the trading floors and Washington's corridors this week. First, the Trump administration's threats to dismiss thousands of civil servants, an attempt to shift responsibility for the budget impasse onto Democrats. Second, the increasingly feverish world of artificial intelligence, which continues to levitate investor sentiment.

Between OpenAI's eye-watering $500 billion valuation and a flurry of semiconductor partnership announcements, even the most seasoned investors seem unsure where to look. Wall Street has found in AI not just a growth narrative, but a kind of emotional support system. Each new headline offers the reassurance that the future is, somehow, already priced in. In recent sessions, the rally has broadened. Pharmaceuticals, luxury goods, and automobiles, all relative laggards until now, have joined the upward march. 

In Washington, Republicans continue to hunt for seven Democratic votes to push through a temporary funding plan in the Senate. Healthcare spending is the sticking point: Democrats want to extend subsidies that expire at year's end, while Republicans prefer to deal with the issue separately. Meanwhile, Donald Trump has resorted to threats of mass layoffs to bend arms. It's a reminder that budgetary negotiations in Washington often resemble a tug-of-war conducted over a cliff edge.

Almost lost in this week's euphoria is the matter of tariffs. Treasury Secretary Scott Bessent has expressed optimism about significant breakthroughs in the upcoming round of U.S.–China trade talks. So far, though, progress with China, India, and Brazil has been sluggish.

In Asia-Pacific, markets are moving in all directions. Japan is up 1.7% thanks to the AI boost. Hong Kong is losing some of its previous day's gains, falling 0.7%. India is flat, while Australia is up 0.5%. Mainland China and South Korea are closed for Golden Week. European markets are mainly bullish.

Today's economic highlights:

On the agenda today: Japan's PMIs, followed by those of France, Germany, the Eurozone, and the United Kingdom; In the United States, non-farm employment changes, the unemployment rate, PMIs, and the ISM Services Index are expected. See the full calendar here.

  • Dollar index:97,785
  • Gold: $3,859
  • Crude Oil (BRENT): $64.80 (WTI) $61.20
  • United States 10 years: 4.10%
  • BITCOIN: $120,280

In corporate news:

  • Ford is laying off over 470 workers in South Africa due to a drop in European demand for its Ranger pickup and plug-in hybrid models.
  • Oracle revealed that some of its E-Business Suite customers received extortion emails linked to vulnerabilities, with Google confirming the campaign's ties to the Clop ransomware group.
  • OpenAI asked a federal judge to dismiss a trade secret lawsuit from xAI, accusing Elon Musk of harassment and asserting its right to hire former xAI employees.
  • Apple removed the ICEBlock app from the App Store after pressure from the Trump administration over safety concerns regarding Immigration and Customs Enforcement agents.
  • Microsoft is investing over $33 billion in neocloud firms like Nebius and CoreWeave to secure AI data center capacity, including access to 100,000 Nvidia chips.
  • Google will invest $4 billion to build an AI-focused data center in Arkansas, powered by a solar project and aimed at boosting energy affordability.
  • Applied Materials expects a $600 million revenue hit in 2026 due to tightened U.S. export restrictions affecting shipments to Chinese firms.
  • Vistra received FERC approval to acquire a 2,600 MW natural gas generation fleet from Lotus Infrastructure Partners, with deal closing expected by early 2026.
  • DP World and PayPal signed an agreement to develop a digital payments platform to enhance speed and transparency in cross-border trade.
  • Indian ministers are urging the adoption of domestic apps over Google and Microsoft products as part of a national push for tech sovereignty amid strained U.S.-India trade relations.
  • A major fire broke out in Chevron's jet fuel unit at its El Segundo refinery near Los Angeles, which has since been contained, temporarily lifting oil prices.
  • A group of Tesla shareholders urged investors to vote against Elon Musk's proposed $1 trillion pay package, citing governance and performance concerns. The carmaker disappointed investors with Q3 production and delivery figures despite a surge in sales.
  • Alphabet Inc. retains its stake in Verily and resolves potential YouTube content blackout with NBCUniversal.
  • Applied Materials anticipates a $710 million revenue impact by fiscal 2026 due to US export restrictions.
  • Boeing delays 777X aircraft delivery to 2027, facing billions in charges due to production delays.

Analyst Recommendations:

  • Coinbase Global, Inc.: Rothschild & Co Redburn upgrades to buy from neutral with a price target raised from USD 325 to USD 417.
  • Corteva, Inc.: KeyBanc Capital Markets downgrades to sector weight from overweight.
  • Hf Sinclair Corporation: Morgan Stanley maintains overweight and raises the target price from USD 50 to USD 60.
  • Instacart (Maplebear): Piper Sandler & Co downgrades to neutral from overweight and reduces the target price from USD 62 to USD 41.
  • Knight-Swift Transportation Holdings Inc.: Stifel upgrades to buy from hold and reduces the target price from USD 47 to USD 45.
  • Marathon Petroleum: Stanley maintains overweight with a price target raised from USD 182 to USD 200.
  • Occidental Petroleum: HSBC upgrades to buy from hold and raises the target price from USD 48 to USD 55.
  • Paypal Holdings, Inc.: Wolfe Research downgrades to peerperform from outperform.
  • Pbf Energy Inc.: Morgan Stanley downgrades to underweight from equalwt with a price target raised from USD 24 to USD 27.
  • Phillips 66: Morgan Stanley maintains equalwt with a price target raised from USD 128 to USD 140.
  • Woodward, Inc.: Wolfe Research upgrades to outperform from peerperform with a target price of USD 300.
  • Aerovironment, Inc.: Citizens maintains its market outperform recommendation and raises the target price from USD 325 to USD 400.
  • Americold Realty Trust, Inc.: KeyBanc Capital Markets maintains its overweight recommendation and reduces the target price from USD 23 to USD 18.
  • Cleveland-Cliffs Inc.: BNP Paribas Exane maintains its underperform recommendation and raises the target price from USD 5 to USD 7.80.
  • CoreWeave, Inc.: Arete Research maintains its buy recommendation and raises the target price from USD 180 to USD 234.
  • Corning Incorporated: Mizuho Securities maintains its outperform rating and raises the target price from USD 74 to USD 90.
  • Elanco Animal Health Incorporated: TD Cowen maintains its buy recommendation and raises the target price from USD 17 to USD 23.
  • Insmed Incorporated: Goldman Sachs maintains its buy recommendation and raises the target price from USD 142 to USD 196.
  • Monolithic Power Systems, Inc.: Citi maintains its buy recommendation and raises the target price from USD 825 to USD 1100.