Nasdaq 100 and S&P500: Tech Stocks Lead Recovery as Shutdown Deal Lifts Sentiment Today

Stock Futures Rebound as Government Shutdown Deal Gains Momentum

U.S. stock index futures rallied early Monday as signs emerged that lawmakers were closing in on a deal to end the historic government shutdown. Futures tied to the S&P 500 were up nearly 1%, Nasdaq-100 futures jumped 1.5%, and Dow futures gained 198 points, or 0.4%.

A procedural vote in the Senate cleared the way for additional action on a federal funding bill. The proposal would keep the government open through January and reinstate federal jobs lost during the shutdown. Though it omits ACA subsidy extensions, it includes a provision for a vote on the issue next month.

Will a Shutdown Resolution Revive Sentiment?

Investor mood has soured, with the University of Michigan reporting the weakest consumer sentiment reading in over three years. The extended shutdown has already led to the suspension of key economic releases such as the CPI and PPI reports scheduled for this week. Traders are watching the Senate and House closely as final votes approach.

Last week, the Nasdaq fell 3%, posting its worst loss since the April 2025 tariff-driven decline. The S&P 500 lost 1.6% and the Dow dropped 1.2%. High valuations in AI-linked stocks triggered a broader pullback, especially across tech.

AI Stocks Under Pressure – Is It a Bubble?

Despite stretched valuations, Goldman Sachs insists the AI sector is not in bubble territory. Strategists cite robust earnings, stable household savings, and moderate corporate leverage as key differences from the dot-com era. However, they recommend hedging with call options to limit downside risk while maintaining exposure to further upside.

Top names like Nvidia, Microsoft, and Palantir led the early-morning rebound.

The VanEck Semiconductor ETF (SMH) rose over 2% in premarket trading after China relaxed rare earth mineral export controls.

What’s on Deck This Week in Earnings?

Walt Disney, Cisco Systems, and several AI infrastructure firms headline the earnings calendar. Cisco is expected to post an 8% gain in earnings and provide an update on its growing AI data center business. Meanwhile, Oklo, Rocket Lab, and Siemens Energy are set to report, offering insight into the next wave of nuclear and space tech investments.

Disney’s Q4 results will be closely watched as it phases out detailed streaming metrics. Analysts expect a modest decline in earnings and weaker theme park revenue.

Outlook: Rebound or Risk-Off?

Market sentiment could stabilize if Congress passes a funding bill and major earnings surprise to the upside. Still, traders should remain cautious given recent volatility in high-growth sectors. With economic data delayed and the AI trade under scrutiny, any upside may be limited until clearer signals emerge from Washington and corporate America.

More Information in our Economic Calendar.