'All news is good news': Wall Street shrugs off government shutdown, jobs report delay
Investors largely shrugged off the start of the US government shutdown, with the major indexes continuing to notch record highs as Wall Street leaned on AI momentum and expectations for further easing of interest rates by the Federal Reserve.
The stock market rally, led by large-cap tech, comes even as Washington gridlock delays critical economic data, including the September jobs report. Without those figures, both investors and policymakers are flying blind, turning instead to private-sector readings that point to a sharper slowdown in the labor market.
Yet the missing data hasn’t derailed the market’s recent record run.
“There’s a certain amount of nihilism,” Steve Sosnick, chief strategist at Interactive Brokers, told Yahoo Finance on Friday. “All news is good news, and no news matters. By not getting this [jobs report], that’s one less impediment in the market’s relentless rise.”
That relentless rise comes even as questions mount over how long the optimism can last, with Amazon founder Jeff Bezos warning that today’s AI boom may be blurring the line between innovation and excess.
Speaking at Italian Tech Week, Bezos said investors are funding “every experiment” — the good ideas and the bad — making it harder to separate lasting opportunities from hype. Still, he emphasized the underlying technology is real, predicting AI will enhance productivity and quality across nearly every industry.
“We’re in a wonderful period right now where everybody’s so optimistic,” said George Seay, founder and chairman of hedge fund Annandale Capital. “It’s really fun while it lasts, and enjoy it while it lasts. But eventually, these things all end at some point. Markets don’t go up forever.”
Seay added that rather than trying to time the next downturn, investors should focus on getting allocations right and avoiding reactionary moves.
“Investors should just ignore that and pick great companies or great ETFs or index funds and just leave it alone and do as little as possible,” he said. “The less they do, the better. Just get your allocation right, get it in place, and go live your life.”
Still, the absence of official data amid the shutdown leaves the Federal Reserve in a difficult position, adding uncertainty around the path of rate cuts and the broader economy.
Read more: How the government shutdown affects your student loans, Social Security, and more
“It’s a real problem without the government data,” Kathy Jones, chief fixed income strategist at Charles Schwab, told Yahoo Finance on Thursday. “We have private-sector data that’s giving us some information, but it’s not at the level that the government data is. So we’re a little bit in the dark.”
While investors have leaned on reports like ADP employment data and ISM surveys, Jones cautioned those snapshots only go so far. Still, the latest readings paint a consistent picture of a labor market losing steam — a slowdown that could give the Fed more cover to keep easing policy, even without Friday’s official jobs report.
“The longer the shutdown goes on, the less economic activity there is, the greater the risk is that we have a downturn in the economy, or at least a much softer economy in the fourth quarter,” Jones added. “And that could lead the Fed to cut twice rather than the one time that we expect.”
Allie Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.
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