The broad market index S&P 500 barely avoided going into negative territory amid a decline in shares of the technology sector, writes Barron's. Friday's trading closed with a symbolic growth of 0.01% to 6715.8 points. The Dow Jones Industrial Average added 0.5% to close at 46,758.3 points. Both indices recorded new records at the close and posted gains for six consecutive trading days.

"October is traditionally considered a tough month for stocks, but October 2025 started on a bullish note," Barron's quoted Mizuho analyst Daniel O'Regan as saying. - "The S&P hasn't posted a 'perfect week' (5 consecutive sessions in the plus) since early July."

The Nasdaq, by contrast, fell 0.3% to 22,780.5 points at the close of trading on Oct. 43, breaking a five-day streak of gains due to corrections in a number of overbought technology stocks, including Palantir, Tesla and Nvidia.

Wall Street continues to ignore the federal government shutdown, which is now in its third day. The CBOE Volatility Index (VIX), which is also called the "Fear Index", has risen sharply, indicating that some investors are rushing to hedge against a possible decline in the S&P 500, buying put options, writes CNBC. Nevertheless, the key indices of the U.S. market at the end of the week remained in the plus: S&P 500 and Dow since Monday added about 1.1%, Nasdaq Composite rose by 1.3%, and Russell 2000 - almost 2%.

What's worrying Wall Street

Due to the shutdown, the publication of official statistics, including the September nonfarm payrolls report, has been suspended. Meanwhile, the private ADP report released earlier this week showed a decline of 32,000 jobs in the U.S. private sector in September. Traders tend to focus on data from the Labor Department.

President Donald Trump added cause for concern about the labor market Thursday as he threatened large-scale layoffs of government workers. Treasury Secretary Scott Bessent said on CNBC that the current government shutdown could lead to "a blow to GDP, to economic growth and to working America."

The key macroeconomic event of the day was the Institute for Supply Management (ISM) index of business activity in the services sector, which fell to 50, while expectations were for 52. A value below 50 indicates a contraction in business activity, while a value above it indicates growth.

"ISM indexes show the economy barely grew in September and employment probably declined," Comerica Bank chief economist Bill Adams told Barron's. - Most participants in the ISM manufacturing and services surveys reported layoffs in September."

According to CME's FedWatch tool, there is a 95.7% chance of a Fed rate cut in October and an 85.1% chance of a cumulative half-percentage-point cut by the end of the year.

"We view the mixed, privately sourced data for September, which now serves as a replacement for the delayed Labor Department report, as weak enough to justify another Fed rate cut at the Oct. 29 meeting," Jennifer Timmerman, senior investment strategy analyst at Wells Fargo Investment Institute, told CNBC. - "Expectations of further Fed policy easing, reinforced by the yellow flag raised by the fresh jobs data, fueled the stock market rally and kept the 10-year government bond yield at 4.11% - low enough to push the S&P 500 to a new all-time high."

This article was AI-translated and verified by a human editor

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