S&P Futures exhibited minimal variation on Thursday following an ongoing market rotation that propelled the Dow Jones Industrial Average to new peaks. Futures associated with the Dow Jones Industrial Average increased by 17 points, while the S&P futures declined by 0.1%, mirroring the movement of Nasdaq-100 futures. On Wednesday, a notable divergence was observed between technology stocks and other segments of the market, with value-oriented sectors like health care demonstrating superior performance. The recent rotation has provided some respite for investors seeking a diversification of their portfolios; however, it may also indicate an increasing wariness towards risk-on assets.
The Dow on Wednesday achieved a closing value exceeding 48,000 for the inaugural occasion, positioning the 30-stock index for its most favorable weekly performance since late June. The S&P 500 concluded the day with a modest increase, marking its fourth consecutive day of gains, while the tech-centric Nasdaq Composite ended the session in negative territory. “We have rebounded in dramatic fashion from the April lows,” stated Eric Teal. “Most importantly, the market is expanding its scope beyond merely growth and technology sectors, now encompassing industrials, financials, and healthcare.” Small-cap stocks are joining the rally, as declining short-term interest rates signal potential outperformance for this segment.
Investors maintained a sense of optimism regarding the resolution of the U.S. government shutdown, which has now become the longest in history, extending over a duration of six weeks. The House of Representatives passed a short-term funding bill with a vote of 222-209, effectively resolving the current deadlock until at least the end of January, and President Donald Trump has indicated his intention to sign it. The prolonged halt left investors navigating without essential economic indicators, including the October jobs report and inflation figures, which has played a role in the recent volatility of the market.
On Wednesday, White House press secretary Karoline Leavitt informed that the release of these reports may ultimately be unlikely, and indicated that the shutdown could potentially reduce fourth-quarter economic growth by as much as 2 percentage points. Most economists anticipate a negligible effect on U.S. GDP, however.