US stocks ended mixed on Friday as investors weighed the ongoing government shutdown against continued strength in equities. The S&P 500 closed little changed, up just 0.01% at 6,715.79, while the Nasdaq Composite slipped 0.28% to 22,780.51. The Dow Jones Industrial Average outperformed, rising 0.5% to 46,758.28, and the Russell 2000 gained 0.7% to 2,476.18. All four major indexes hit fresh intraday highs before fading in the afternoon.
Technically, the Nasdaq flashed a bearish outside day pattern after setting a new high earlier in the session, a move that traders often interpret as a short-term warning signal for further declines.
Losses in key technology names dragged the broader market lower late in the session. Palantir fell 7.5% to lead declines in the S&P 500, while Tesla and Nvidia each slipped around 1%. The CBOE Volatility Index spiked, suggesting traders were hedging against potential weakness ahead.
Despite the muted finish, all major indexes logged solid weekly gains. The S&P 500 and Dow each rose about 1.1%, the Nasdaq added 1.3%, and the Russell 2000 jumped nearly 2%. The rally has held up even as the US government shutdown entered its third day, disrupting economic data releases and stalling federal operations.
The shutdown has blocked the release of September’s nonfarm payrolls report, leaving investors without one of the Fed’s key indicators ahead of its late-October meeting. While the data blackout removes a potential market risk, it also complicates the central bank’s policy outlook. Traders expect the Fed to cut rates by a quarter point next month, according to CME FedWatch data.
Adding to uncertainty, President Donald Trump has threatened large-scale layoffs across federal agencies, saying the funding lapse presents an “unprecedented opportunity” to shrink government. Treasury Secretary Scott Bessent warned the shutdown could hit growth and employment, with the Congressional Budget Office estimating 750,000 daily furloughs.
Private payroll data earlier in the week showed the steepest drop since March 2023, reinforcing signs of a cooling jobs market. Wells Fargo’s Jennifer Timmerman said the weakness should “justify another interest rate cut” at the October Fed meeting.
