Tariffs, tech, and turmoil: How AI and politics moved the market
As New York wakes, investors scan their screens. Futures edge higher, and there’s a background hum of dread about the government’s finances. The US stock market — rugged, restless, often a game of nerves — comes alive today with a cocktail of breakthrough optimism and looming uncertainty. The story, this Monday, reads like a classic Wall Street thriller: new tariffs, a government shutdown around the corner, and the AI sector sprinting ahead.
Tariffs, tech, and the shutdown standoff
Last week, President Trump confirmed a raft of new tariffs — 100% on branded pharmaceuticals, 25% on heavy trucks, 50% on kitchen cabinets, and 30% on upholstered furniture. These tariffs landed as the government edged closer to a shutdown, with negotiations in Congress stalling. “Should a shutdown occur and the Bureau of Labour Statistics is unable to release employment or inflation figures, the anticipated October rate cut could face delays,” said Thomasons, a US economist at Jefferies. Market participants know the headlines matter, but history gives them a sense of perspective.
Keith Lerner, chief investment officer at Truist Wealth, wrote, “Prior government shutdowns have had minimal lasting economic impact. They tend to mimic a hurricane or a snowstorm, delaying most activity and quickly making up for it upon reopening”. It’s not rainbows for everyone, however. The Trump administration may permanently furlough staff at some agencies, and that possibility could drive a spike in unemployment claims.
Despite the headlines, Wall Street’s resilience stands out. S&P 500, Dow Jones, and Nasdaq each gained ground today, unwinding some of last week’s losses and bolstered by robust GDP figures and strong durable goods orders. This isn’t just a bounce — it's a signal that investors, while cautious about the shutdown, are neither panic-stricken nor running for the exits.
AI ambition: Nvidia and OpenAI steal the show
Yet, what really grabs attention this week is technology and the promise of artificial intelligence. Nvidia’s announcement of a $100 billion investment in OpenAI — a landmark partnership to develop supercomputing capacity — set Silicon Valley buzzing and sent Nvidia’s shares soaring by 4.4%. “Everything starts with compute,” declared OpenAI CEO Sam Altman. “Compute will be the foundation of the economy of the future, and we leverage what we’re developing with Nvidia to achieve new AI advancements and empower individuals and businesses at scale”.
The deal has prompted both exhilaration and scepticism. Stacy Rasgon, analyst at Bernstein, cautioned, “This arrangement aids OpenAI in achieving some ambitious objectives for compute infrastructure, while also ensuring that such resources are developed by Nvidia. However, the 'circular' concerns that have been raised previously may be amplified by this deal”. Analysts warn of a potential AI bubble as rapid investment and circular transactions reshape perceptions of growth and inflate valuations of tech companies.
The Nasdaq 100, leading the charge, has pulled back from its historic highs as profit-taking kicked in and some experts flagged stretched valuations. Yet, tech stocks maintain momentum. Oracle, collaborating with OpenAI, experienced a 6% rally, exemplifying investor excitement in the sector.
Investors today find themselves at the intersection of high-stakes policy, historic tech investments, and classic US market hardiness. It's a tale that reads with dramatic tension, but also — for those with eyes on the long game — unwavering optimism. As Lerner notes, shutdowns are rarely the market’s undoing; tech and innovation, meanwhile, might be Wall Street’s lasting legacy this autumn.
Disclaimer: The views and recommendations made above are those of individual analysts or brokerage companies, and not of Winvesta. We advise investors to check with certified experts before making any investment decisions.
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As New York wakes, investors scan their screens. Futures edge higher, and there’s a background hum of dread about the government’s finances. The US stock market — rugged, restless, often a game of nerves — comes alive today with a cocktail of breakthrough optimism and looming uncertainty. The story, this Monday, reads like a classic Wall Street thriller: new tariffs, a government shutdown around the corner, and the AI sector sprinting ahead.
Tariffs, tech, and the shutdown standoff
Last week, President Trump confirmed a raft of new tariffs — 100% on branded pharmaceuticals, 25% on heavy trucks, 50% on kitchen cabinets, and 30% on upholstered furniture. These tariffs landed as the government edged closer to a shutdown, with negotiations in Congress stalling. “Should a shutdown occur and the Bureau of Labour Statistics is unable to release employment or inflation figures, the anticipated October rate cut could face delays,” said Thomasons, a US economist at Jefferies. Market participants know the headlines matter, but history gives them a sense of perspective.
Keith Lerner, chief investment officer at Truist Wealth, wrote, “Prior government shutdowns have had minimal lasting economic impact. They tend to mimic a hurricane or a snowstorm, delaying most activity and quickly making up for it upon reopening”. It’s not rainbows for everyone, however. The Trump administration may permanently furlough staff at some agencies, and that possibility could drive a spike in unemployment claims.
Despite the headlines, Wall Street’s resilience stands out. S&P 500, Dow Jones, and Nasdaq each gained ground today, unwinding some of last week’s losses and bolstered by robust GDP figures and strong durable goods orders. This isn’t just a bounce — it's a signal that investors, while cautious about the shutdown, are neither panic-stricken nor running for the exits.
AI ambition: Nvidia and OpenAI steal the show
Yet, what really grabs attention this week is technology and the promise of artificial intelligence. Nvidia’s announcement of a $100 billion investment in OpenAI — a landmark partnership to develop supercomputing capacity — set Silicon Valley buzzing and sent Nvidia’s shares soaring by 4.4%. “Everything starts with compute,” declared OpenAI CEO Sam Altman. “Compute will be the foundation of the economy of the future, and we leverage what we’re developing with Nvidia to achieve new AI advancements and empower individuals and businesses at scale”.
The deal has prompted both exhilaration and scepticism. Stacy Rasgon, analyst at Bernstein, cautioned, “This arrangement aids OpenAI in achieving some ambitious objectives for compute infrastructure, while also ensuring that such resources are developed by Nvidia. However, the 'circular' concerns that have been raised previously may be amplified by this deal”. Analysts warn of a potential AI bubble as rapid investment and circular transactions reshape perceptions of growth and inflate valuations of tech companies.
The Nasdaq 100, leading the charge, has pulled back from its historic highs as profit-taking kicked in and some experts flagged stretched valuations. Yet, tech stocks maintain momentum. Oracle, collaborating with OpenAI, experienced a 6% rally, exemplifying investor excitement in the sector.
Investors today find themselves at the intersection of high-stakes policy, historic tech investments, and classic US market hardiness. It's a tale that reads with dramatic tension, but also — for those with eyes on the long game — unwavering optimism. As Lerner notes, shutdowns are rarely the market’s undoing; tech and innovation, meanwhile, might be Wall Street’s lasting legacy this autumn.
Disclaimer: The views and recommendations made above are those of individual analysts or brokerage companies, and not of Winvesta. We advise investors to check with certified experts before making any investment decisions.
Ready to earn on every trade?
Invest in 11,000+ US stocks & ETFs