Stock markets faced a decline on Friday due to the ongoing US government shutdown, causing concern among investors. President Donald Trump dismissed worries about an AI bubble. Despite some major tech companies making gains late in the day, the overall sentiment was cautious. The Dow and S&P 500 closed slightly up, while the Nasdaq ended lower.
Investors have grown wary of overvalued stocks and uncertainties surrounding significant AI investments. Tom Cahill from Ventura Wealth Management highlighted concerns about the profitability of data centers in the future and the impact of the prolonged government shutdown on the labor market.
President Trump expressed optimism about AI, stating it will play a crucial role in the future. A revised proposal from Senate Democratic Leader Charles Schumer provided a late boost to US stocks, although it was quickly rejected by leading Republicans. The shutdown has caused unease among investors due to the lack of government data and potential economic repercussions.
Consumer sentiment has been affected by the shutdown, with a University of Michigan survey indicating concerns about the economy. Layoffs in the US reached a 22-year high last month, further adding to economic uncertainties. Private data has become essential for assessing the state of the economy in the absence of official reports.
The shutdown led to the cancellation of numerous flights on Friday to alleviate pressure on air traffic controllers. Additionally, China’s export figures dropped in October, marking the first decline in eight months, amid escalating trade tensions before a detente between President Xi Jinping and Trump.
London’s FTSE 100 index was negatively impacted by disappointing earnings updates from online property business Rightmove and British Airways owner IAG, which fell below market expectations.