Both the S&P 500 ETF (SPY) and the Nasdaq 100 ETF (QQQ) were able to stage recoveries from their early morning intraday lows, although only the S&P 500 was able to close in positive territory.
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The eight largest AI stocks, which include Nvidia (NVDA), Meta Platforms (META), and Palantir (PLTR), have lost a combined $911 billion in market capitalization since last Friday, according to the Financial Times. Fears of a bubble and elevated valuations in tech stocks have driven the losses, which were exacerbated after OpenAI CFO Sarah Friar stirred concerns of a capital shortfall in the AI sector by saying, and then quickly retracting, that the government would “backstop” the company’s investments. White House AI and Crypto Czar David Sacks later said in an X post that “There will be no federal bailout for AI.”
President Trump doesn’t seem to be worried about the tech selloff. In response to a reporter’s question about whether he was concerned about an AI bubble, he responded, “No, I love AI. I think it’s going to be very helpful. So many things are happening with it.”
Amid the 38th day of the government shutdown, Senate Minority Leader Chuck Schumer said Democrats would vote in favor of a continuing resolution bill that extends Affordable Care Act (ACA) subsidies by one year, although the offer was rejected by Republicans.
The latest attempt to reopen the government comes amid Transportation Secretary Sean Duffy warning that flight cuts could rise to between 15% and 20% if the shutdown extends even further. Flight reductions will reach 4% on Friday and 10% by next week at 40 airports affected by employee shortages.
Government shutdown disruptions have started to affect the consumer, with the University of Michigan’s preliminary Index of Consumer Sentiment for November coming in at 50.3, just barely above the all-time low of 50.0 set in June 2022.
“Consumer sentiment fell back about 6% this November, led by a 17% drop in current personal finances and a 11% decline in year-ahead expected business conditions,” said Surveys of Consumers Director Joanne Hsu. Consumers also expect higher prices to stick with year-ahead inflation expectations of 4.7%, up from 4.6% in October.
The S&P 500 (SPX) closed with a 0.13% gain, while the Nasdaq 100 (NDX) fell by 0.28%.
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