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U.S. Markets Close Mixed as Nasdaq Slips, S&P 500 and Dow Hit Records

Despite a government shutdown and U.S. export restrictions on China, investors remain optimistic about stocks, with record inflows into equity funds. Energy stocks face pressure due to OPEC+ output concerns.

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In this image I can see the street, few persons standing in the street and few buildings on both...
In this image I can see the street, few persons standing in the street and few buildings on both sides of the street. I can see the wall. In the background I can see few mountains and the sky.

U.S. Markets Close Mixed as Nasdaq Slips, S&P 500 and Dow Hit Records

U.S. markets ended the week on a mixed note, with the Nasdaq Composite and energy stocks facing pressure, while the S&P 500 and Dow Jones Industrial Average reached record highs. Investors remained optimistic despite a government shutdown and fresh U.S. export restrictions on China.

The Nasdaq Composite slipped by roughly 0.3% due to losses in several large technology and semiconductor stocks. The technology sector was divided, with AI-related companies gaining investor enthusiasm, while several semiconductor names faced pressure due to new U.S. export restrictions on China. Meanwhile, the S&P 500 managed a small gain of less than 0.1%, pushing into record territory. U.S. equity funds attracted $36.4 billion in net inflows, the most significant weekly influx since November 2020, indicating broad confidence among institutional and retail investors that stocks remain attractive relative to bonds. Market sentiment this week was heavily influenced by expectations surrounding Federal Reserve policy, with traders and equity investors increasingly anticipating a 25 basis point rate cut in October.

Energy stocks reflected weakness in commodities, with several major integrated oil companies pulling back from recent highs due to reports that OPEC+ may increase output and concerns about global demand. The Dow Jones Industrial Average ended Friday higher, gaining nearly half a percent and reaching a fresh record high. Small-cap stocks, represented by the Russell 2000, posted the most substantial weekly gain of 1.7%, buoyed by expectations that lower interest rates will provide relief for domestically focused firms with higher borrowing costs.

The government shutdown, which began earlier this week, has created complications for both investors and policymakers, with key economic data releases delayed. Despite these challenges, leading banks and investment firms with the largest inflows supported the Dow Jones and S&P 500 at the end of the month, driven by optimism around AI partnerships and expectations of an October Fed rate cut.

The U.S. financial markets closed the week with a mix of strength and caution, marking another record-setting stretch for the Dow Jones Industrial Average and the S&P 500. While the Nasdaq Composite and energy stocks faced pressure, investors remained optimistic about the outlook for stocks, driven by expectations of a Fed rate cut and strong inflows into equity funds. The government shutdown and delayed economic data releases may introduce uncertainty in the coming weeks, but markets continue to show resilience.

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