Shutdown Doesn’t Phase Market as Stocks Hit Records
Day three of the federal government shutdown came and went Friday, with no end in sight. Despite this, the stock market continued to reach all-time highs before experiencing a slight pullback. The S&P 500 eked out a fractional gain on Friday, marking its 29th record-high close since the market’s tariff lows in early April. The Nasdaq experienced a modest decline Friday, following its 30th record close since early April on Thursday. Both indices have logged four positive weeks in the past five, starting the new month strong after robust September and third-quarter performances.
Jim Cramer stated on Tuesday, hours before federal funding lapsed, that a government shutdown is a “non-event,” adding, “I don’t want anyone to sweat it.” The market appears to have reached the same conclusion.
The best-performing stocks of the week were in the health sector. Shares of life sciences firm Danaher surged over 16%, and drugmaker Eli Lilly jumped nearly 16%. This relief rally followed President Donald Trump’s deal to exempt Pfizer from pharmaceutical tariffs in exchange for the company’s commitment to lower drug prices and increase domestic manufacturing investment. Healthcare was the strongest performing sector within the S&P 500’s 11 sectors for the week. Utilities and information technology secured the No. 2 and No. 3 spots, respectively, as the artificial intelligence trade continued to thrive. Utilities benefited from the increased power demand of AI data centers, while tech saw a boost as club stock Nvidia reached record highs on Thursday, though it experienced a modest dip on Friday. utilities also rose with power provider AES, spurred by reports of BlackRock’s Global Infrastructure Partners considering a $38 billion acquisition. GIP, acquired by BlackRock last year, was also reportedly in talks to purchase Aligned data Centers for around $40 billion. BlackRock shares ended Friday flat,just below Tuesday’s record-high close.
Nike stock advanced after exceeding Wall Street’s expectations in its quarterly earnings report released Tuesday evening. The results demonstrated progress in CEO Elliott Hill’s turnaround strategy. Nike had previously projected a mid-single-digit percentage decline in revenue for the current quarter, but instead, revenue increased by 1%. “Turnarounds require management credibility, and the best way to create that is by beating the guidance you give the Street,” Jeff Marks, director of portfolio analysis for the Club, wrote in his earnings analysis. “Nike’s results were far better than the guidance that executives offered three months ago.” Management’s efforts to address Nike’s structural issues were a key factor in the Club initiating a position last week, and additional shares were purchased on Wednesday following the positive earnings report. The initial Nike position was established on September 26.
On Wednesday, the Club also took some profits on Bristol Myers Squibb to free up capital for potentially better opportunities.Shares had risen earlier in the week due to the relief rally in large-cap drug stocks following the Trump-Pfizer agreement. Despite trimming the position, the Club incurred a roughly 20% loss on Bristol Myers stock purchased in November 2024. The long-term outlook for Bristol Myers hinges on the outcome of a key trial for its schizophrenia drug Cobenfy, which has recently faced setbacks.
On Tuesday, the Club added to its Boeing holdings after the stock unexpectedly relinquished some of its gains linked to recent positive news.