Wall Street showed resilience but also signs of strain on Friday, as a third straight day of government shutdown injected uncertainty into markets. The delay of the September jobs report created a temporary data blackout, leaving investors reliant on private signals to gauge economic health ahead of the Federal Reserve’s October policy meeting. The session highlighted the delicate balance between optimism over potential rate cuts and pressure from underperforming technology shares.

Tech Weakness Weighs on Nasdaq

The Nasdaq Composite turned lower, falling 0.6%, as a cluster of technology heavyweights dragged the index into negative territory. Palantir Technologies shed 7.7% in one of the day’s sharpest moves, while Tesla and Nvidia lost 3% and 1%, respectively. Applied Materials also declined 2.7% after revealing a $600 million revenue hit tied to semiconductor export restrictions, underscoring the fragility of global supply chains and the policy headwinds facing the sector.

The downturn in tech stands in contrast to the broader market’s more measured performance. For investors, the divergence illustrates both the concentration risk tied to a handful of mega caps and the difficulty of sustaining gains when regulatory and geopolitical pressures weigh heavily on innovation-driven companies.

Dow Extends Gains, S&P 500 Holds Ground

The Dow Jones Industrial Average advanced more than 300 points, briefly crossing an all-time high of 47,000, while the S&P 500 traded near flat. Despite the day’s muted moves, both indexes are on track for weekly gains, with the S&P 500 rising 1.1% and the Dow up 1%.

Beyond daily volatility, underlying momentum remains strong. The U.S. 500 index—a widely tracked benchmark—closed at 6,728 points on October 3, a modest 0.18% increase from the prior session. Over the past month, the index has gained 3.47% and now stands nearly 17% higher compared to a year earlier. Such resilience signals investor confidence, though the gains are increasingly dependent on policy expectations rather than hard data.

Shutdown Data Blackout and Fed Policy Outlook

The shutdown has disrupted the flow of official economic data, leaving traders without the September jobs report and complicating forecasts for the Fed. Instead, markets turned to private labor indicators, which hinted at slowing job growth while reinforcing expectations that the Fed could deliver another rate cut later this month.

This dynamic raises the stakes for policymakers. Without fresh labor statistics, the Fed must rely more heavily on fragmented private data and forward-looking indicators. Investors, meanwhile, are caught balancing optimism about rate relief with concern that structural risks—including prolonged shutdown politics—could dampen growth.

What Comes Next for Wall Street?

Looking ahead, the market’s trajectory hinges on two interlocking forces: political resolution in Washington and monetary strategy from the Fed. If the shutdown drags on, the absence of official data could heighten volatility, particularly in rate-sensitive sectors. At the same time, the Fed’s willingness to cut rates in the face of political and economic uncertainty will determine whether equities can extend their rally or face a recalibration.

For now, the mixed close underscores a simple reality: Wall Street remains resilient, but the balance between optimism and caution is increasingly fragile. Investors on both sides of the Atlantic will be watching whether the rally can withstand mounting policy headwinds.