Nasdaq Soars to All-Time High as Government Shutdown Continues

Nasdaq closed at an all-time high on Thursday, propelled by surging technology shares, even as the U.S. government remained partially shut down for a second consecutive day.

The tech-heavy index gained 0.39%, finishing at 22,844 points, marking its highest closing level in history. The S&P 500 edged up 0.07% to 6,715 points, narrowly missing its own record close, while the Dow Jones Industrial Average climbed 0.18% to settle at 46,523 points.

Despite political gridlock and a growing void of official economic data due to the shutdown, markets remained buoyant, largely thanks to a rally in semiconductor and AI-driven tech stocks, with industry leaders Nvidia and Broadcom taking center stage.

“Technology continues to drive this market, particularly the semiconductor sector, which hit record highs today,” said Jim Baird, Chief Investment Officer at Plante Moran Financial Advisors. “Investors are choosing to look past near-term uncertainties in favor of long-term innovation potential.”

The rally comes amid a notable absence of government-issued economic data, a consequence of the ongoing federal shutdown. In response, investors turned to alternative sources for labor market insights.

A new report from Challenger, Gray & Christmas, a global outplacement firm indicated a decline in U.S. job cuts during September. However, it also noted that year-to-date hiring plans remain at their lowest levels since 2009, reflecting broader caution in the labor market.

Meanwhile, the ADP National Employment Report released a day earlier came in weaker than expected, further fueling speculation that the job market may be losing steam.

“The market is reading weak labor data not as a red flag, but as a green light for potential interest rate cuts,” Baird added. “That’s a big part of what’s helping equities stay afloat.”

The market’s resilience is also raising eyebrows over valuation levels. The forward price-to-earnings (P/E) ratio for the S&P 500 has climbed to 23.1, suggesting that investors are paying a premium for anticipated earnings, a move that historically signals both optimism and risk.

While tech stocks led the charge, not all sectors shared in the gains. Consumer discretionary shares, particularly Tesla, were a drag on the broader index as the company’s stock faced renewed selling pressure.

Still, analysts suggest that the strong performance of tech has provided a cushion against wider market volatility, with many seeing the current rally as a continuation of a longer-term shift toward digital infrastructure and AI.

Though markets have historically weathered government shutdowns with minimal long-term impact, the current climate of political polarization has investors on edge.

“It’s not the shutdown itself that worries investors,” said Baird, “but the entrenched standoff in Washington. If this drags on, it could begin to impact consumer confidence and corporate planning.”