The U.S. stock market opened the week higher, with the S&P 500 and Nasdaq climbing as investors weighed the risks of a government shutdown.
The rally extended Friday’s gains, when an in-line inflation print kept alive hopes for rate cuts despite all three major indexes posting weekly declines.
At 10:03 a.m. ET, the Dow Jones Industrial Average slipped 17.64 points, or 0.04%, to 46,228.17, while the S&P 500 advanced 25.48 points, or 0.38%, to 6,669.18. The Nasdaq Composite surged 178.39 points, or 0.79%, to 22,662.67, driven by strength in technology stocks and the semiconductor sector.
Technology shares powered the rally, with the S&P 500 technology sector up 1%. Nvidia rose 2.8%, Micron Technology climbed 4.9%, and Lam Research added 2.6% after Deutsche Bank upgraded the chip-equipment maker to “buy” from “hold.”
These gains pushed the broader Philadelphia Semiconductor Index to a record high, boosting the Nasdaq. Communication services stocks also advanced, rising 0.8% on the S&P 500, while energy shares fell 1.9%, dragged down by Chevron’s 2.3% drop.
Market watchers say the S&P 500’s resilience is notable, with BTIG highlighting that the index has gone 103 trading days without dipping below its 50-day moving average. The firm cautioned the streak signals market strength but also suggests a pullback could be due.
Investors are bracing for a potential government shutdown as Republicans and Democrats remain at an impasse over funding. The standoff could trigger a shutdown beginning Wednesday, the first day of the 2026 fiscal year.
“I don’t think the shutdown is the doomsday scenario,” said Mel Casey, senior portfolio manager at FBB Capital Partners. “It could actually be an opportunity for Republicans to push through more government spending cuts.” Still, analysts warned that a shutdown could delay key economic data, including Friday’s nonfarm payrolls report, clouding the outlook for markets.
Electronic Arts surged 4.8% after agreeing to a $55 billion leveraged buyout, the largest of its kind. Western Digital gained 9.2% and Seagate Technology rose 7.1% to record highs, helped by broker upgrades. Carnival shares slipped 2.3% despite raising its annual profit forecast.
Advancing issues outpaced decliners by a 1.15-to-1 ratio on the NYSE and a 1.24-to-1 ratio on the Nasdaq. The S&P 500 posted 25 new 52-week highs and four new lows, while the Nasdaq recorded 76 new highs and 41 new lows.
The mixed breadth underscores the market’s uneven strength, as mega-cap technology continues to dominate gains while cyclical sectors like energy lag. Traders will continue to monitor commentary from Fed officials throughout the week for any signs of concern over the potential loss of economic visibility if the shutdown takes hold.
