FX.co ★ Stock market on October 2: S&P 500 and NASDAQ resume gains

Yesterday, US stock indices closed higher. The S&P 500 gained 0.34%, while the Nasdaq 100 added 0.42%. The Dow Jones Industrial Average rose by 0.09%.

Record growth in global indices extended to Asia: equities moved higher after OpenAI reached an agreement with South Korean chipmakers, boosting enthusiasm around artificial intelligence. Asian indices climbed by 1.1%, trading above the record closing level reached last month. The main growth leaders were semiconductor producers. Shares of Samsung Electronics Co. rose by 4.3%, and SK Hynix Inc. surged by 10% after OpenAI approached these companies with a request for chips. This pushed South Korean indices to a historic high. Previously, the S&P 500, Nasdaq 100, and the MSCI global equity index also reached fresh records. Futures on US and European stock indices resumed gains.

The artificial intelligence boom and multi-billion-dollar corporate investments have driven stocks to record highs after the April pullback. Investors also brushed aside the political stalemate in Washington, which led to the first government shutdown in seven years and threatens to disrupt the Federal Reserve's access to key economic data necessary for interest rate decisions.

It is clear that corporations are pouring billions into the development and deployment of AI technologies, and this is immediately reflected in stock prices. Investors, captivated by the prospects of exponential growth, are willing to overlook risks and put money even into companies whose profitability remains uncertain.

The political arena, meanwhile, remains a constant source of tension. The government shutdown, while not entirely unexpected, still creates additional challenges for the economy. The absence of fresh economic data, critically important for the Federal Reserve, could lead to misguided decisions on interest rates and, as a result, destabilize the financial system. However, even these factors have proven unable to stop the relentless rise in equities, which continue to show resilience against any shocks.

In other market segments, US Treasuries extended gains supported by private-sector employment data, which reinforced expectations of a Fed rate cut this month. The dollar held steady, while gold stabilized after a five-day rally that pushed it to back-to-back record highs. Japan's 10-year government bonds eased slightly following the second auction of the week, which met with lukewarm demand.

Meanwhile, the ADP Research report released on Wednesday showed that the number of jobs in US companies unexpectedly declined in September. This aligns with other recent data pointing to a labor market slowdown and prompted traders to increase bets on two additional Fed rate cuts this year. It is worth noting that the earlier JOLTS report also signaled weakening labor demand, offering traders an immediate snapshot of employment conditions. With Bureau of Labor Statistics nonfarm payrolls data likely to be delayed, traders reacted instantly to the most recent information available.

As for the technical picture of the S&P 500, the main task for buyers today will be to break through the nearest resistance level of $6,727. This will pave the way for further gains and open the door to a move toward $6,743. An equally important objective for bulls will be maintaining control above $6,756, which would strengthen buyer positions. In the event of downward pressure amid declining risk appetite, buyers must assert themselves around $6,711. A break below this level would quickly push the instrument back to $6,697 and open the path toward $6,682.