S&P500 and Nasdaq 100: AppLovin and Micron Strengthen Indices in Today’s Trade

S&P 500 and Nasdaq Gain as Traders Look Past Shutdown Risks and Hawkish Fed Talk

The S&P 500 and Nasdaq edged higher on Monday, with dip buyers once again pushing equities up despite Washington gridlock and a hawkish Fed tone. The Dow underperformed, dragged lower by energy and consumer stocks. Traders appear focused on the prospect of near-term rate cuts, while discounting the risk of a U.S. government shutdown later this week.

How Are Indexes Performing?

By mid-session, the S&P 500 gained 12.91 points, or 0.19%, to 6,656.61, while the Nasdaq Composite rose 113.85 points, or 0.51%, to 22,597.92. The Dow Jones Industrial Average slipped 47.59 points, or 0.10%, to 46,199.70.

The S&P 500 has now gone 103 sessions without breaking below its 50-day moving average—a rare streak that signals resilience but may also leave the index vulnerable to a pullback, according to BTIG.

Will a Government Shutdown Derail Market Momentum?

Investors remain cautious over the political standoff in Congress. A shutdown beginning Wednesday could freeze the release of critical economic data, including Friday’s jobs report, potentially clouding market visibility. Goldman Sachs noted that past shutdowns have had limited market impact but warned that conditions this time are not fully comparable.

What Signals Are Coming From the Federal Reserve?

Cleveland Fed President Beth Hammack reiterated the need for restrictive policy to tame inflation, keeping a hawkish tone in play. Still, futures markets are pricing in a 91.4% probability of a 25-basis-point cut at the next Fed meeting. Traders remain firmly in the camp that monetary easing is coming soon, a stance that continues to support risk appetite.

Which Sectors Are Driving Gains?

Tech and semiconductors powered the Nasdaq higher. Nvidia rose 2.1%, Micron gained 4.1%, and Lam Research advanced 2.4% after a Deutsche Bank upgrade. The semiconductor index hit a record high, underscoring sector strength.

Outside chips, AppLovin surged 5.8% after Morgan Stanley raised its price target to $750 from $480. Electronic Arts jumped 4.7% on news of a $55 billion private buyout deal.

Which Stocks Dragged the Dow?

Energy weighed on the Dow, with Chevron down 2.4%. McDonald’s slipped 1%, limiting gains from stronger growth sectors. Meanwhile, cannabis stocks lit up the tape, with Tilray soaring 39.2%, Canopy Growth up 15%, and Cronos adding 13% after political momentum on hemp-related products.

Market Forecast

Traders are betting on the Fed’s dovish turn to keep equities supported, but risks are stacking up. A government shutdown would obscure key economic signals and could test market resilience. With the S&P 500 stretched above its 50-day average, a pullback cannot be ruled out. Near-term, market direction will hinge on Fed commentary and whether Congress can avoid a prolonged funding impasse.

More Information in our Economic Calendar.