Stock market today: Dow, S&P 500, Nasdaq slip as US careens toward first government shutdown in 7 years

US equities edged lower Tuesday as market participants assessed the high probability of a government shutdown by Wednesday, threatening to delay critical economic data releases such as nonfarm payrolls, which could complicate Federal Reserve policy decisions. This coincided with President Trump's expanded tariff imposition and a decline in September consumer confidence to a multi-month low, despite August job openings rising more than expected. Separately, Nvidia surged to a new record on robust AI capital expenditure forecasts and a significant CoreWeave-Meta AI infrastructure deal, while Alphabet is poised for its strongest quarterly gain in two decades, and Robinhood extended its rally driven by prediction market growth and new feature announcements.

Analysis

US equity markets are exhibiting significant divergence, with broad indices like the S&P 500 sliding approximately 0.3% under the weight of macroeconomic and political headwinds, while specific technology sectors demonstrate powerful, catalyst-driven momentum. The primary market overhang is a likely government shutdown, with an estimated 85% probability, which threatens to halt the release of critical economic data from the Bureau of Labor Statistics, thereby complicating the Federal Reserve's policy visibility ahead of its October meeting. This uncertainty is compounded by a new round of tariffs from the Trump administration and a notable decline in the Conference Board's Consumer Confidence Index to its lowest level since April, reflecting consumer pessimism about the job market. In stark contrast, the artificial intelligence theme continues to fuel exceptional gains. Nvidia (NVDA) stock reached a new record over $186, propelled by a Citi forecast for $2.8 trillion in AI capital expenditures through 2029 and a $14 billion AI infrastructure deal between its customer CoreWeave (CRWV) and Meta (META). Beyond AI, other tech names are outperforming, with Alphabet (GOOGL) on pace for its best quarterly gain in 20 years at +35%, and Robinhood (HOOD) extending a rally on product milestones and the teaser of a short-selling feature. Company-specific events are also driving major moves, evidenced by Wolfspeed's (WOLF) 25% surge after exiting bankruptcy and Spotify's (SPOT) 4% decline following the announcement of a CEO transition.

Key Decisions for Investors

• Investors should brace for heightened market volatility and reduced clarity on Fed policy, as a government shutdown is poised to delay key economic data releases like the nonfarm payrolls report.
• The sustained, large-scale capital deployment into AI, exemplified by the $14 billion CoreWeave-Meta deal and bullish capex forecasts, suggests the AI infrastructure theme remains a source of potential alpha, warranting continued exposure to key enablers like Nvidia despite broader market fragility.
• Focus on company-specific catalysts, as demonstrated by significant stock movements in Robinhood, Wolfspeed, and Spotify, which are creating performance divergence and opportunities independent of the overarching macroeconomic narrative.
• Monitor consumer-facing sectors with caution, as the drop in consumer confidence to a multi-month low, specifically citing job market concerns, presents a potential headwind for discretionary spending.