Wall Street wobbles at record highs as shutdown drags into Day 2

The S&P 500 tiptoed higher after notching a fresh intraday record, with traders trying to tune out Washington drama as the federal shutdown rolled into a second day. By the close, the benchmark was up about 0.1% after earlier climbing as much as 0.3% to a new all-time high. The Dow added roughly 114 points, or 0.3%, while the Nasdaq rose 0.4% and briefly set its own record, powered again by Nvidia, which pushed to another peak as the AI trade refused to cool off.

The mood was more cautious than euphoric. Treasury Secretary Scott Bessent told CNBC GDP could “see a hit” from the shutdown, a reminder that the longer Capitol Hill stalemate lasts, the greater the economic drag. That warning cut against the market’s Wednesday swagger, when hopes for a quick resolution helped the S&P 500 log its 29th record close of the year and finish above 6,700 for the first time.

Investors are fixated on duration. With the Senate out Thursday for Yom Kippur, the next possible vote isn’t until Friday, and betting markets are leaning toward a shutdown that could stretch close to two weeks. The political blame game remains entrenched, with Democrats tying their support to extending health-care tax credits and President Donald Trump calling the lapse an “unprecedented opportunity” to cut agencies — rhetoric that Wall Street reads as short-term disruption even if some see long-term cost savings.

What makes this shutdown different for markets isn’t the playbook — equities have often looked through past closures — but the backdrop. Valuations are elevated, leadership is concentrated in a handful of mega-cap tech names, inflation worries haven’t fully gone away, and policy signals are noisier than usual. Add a data blackout and the picture gets murkier: Friday’s nonfarm payrolls won’t print, weekly jobless claims were scrubbed, and the Fed may be flying with fewer instruments just as traders handicap an October rate cut after a soft ADP reading.

Under the surface, the tape still had its stories. Nvidia’s latest burst helped keep the Nasdaq in the green. Tesla popped after stronger-than-expected Q3 deliveries. Fair Isaac ripped higher after unveiling a new credit-score licensing model that rattled the big bureaus. And on the deal front, Berkshire Hathaway agreed to buy Occidental’s OxyChem unit, while newly public Fermi America slipped as the post-IPO rush cooled.

Stocks are holding their nerve at records, but the longer the shutdown clouds the data and the outlook, the harder it gets for the market to skate by on momentum alone.

CNBC, the Wall Street Journal, Reuters, and Investor’s Business Daily contributed to this report.