Stock market today: S&P 500, Nasdaq climb with government shutdown in focus

US stocks mostly climbed Monday, with the S&P 500 and Nasdaq gaining, despite a looming government shutdown with over 70% probability that risks delaying the critical monthly jobs report, impacting Federal Reserve rate cut expectations. Key corporate movers included Electronic Arts surging on a $55 billion acquisition, Nvidia extending gains amid strong demand despite China market concerns, and Intel falling after a recent rally. Conversely, MoonLake Immunotherapeutics plummeted nearly 90% on disappointing drug trial results, while cannabis stocks surged following President Trump's comments on CBD. Economic data showed the Dallas Fed's Texas manufacturing index contracting more than expected, while gold hit a new high on government insecurity and oil fell on anticipated OPEC+ production increases.

Analysis

The US market displayed mixed but resilient performance, with the S&P 500 and Nasdaq gaining 0.4% and 0.9% respectively, despite a looming government shutdown with a perceived probability of over 70%. The primary risk from the shutdown is the potential delay of the monthly jobs report, creating a 'data desert' that could complicate the Federal Reserve's upcoming interest rate decisions, especially after recent data tempered expectations for aggressive cuts. This macro uncertainty is compounded by weakening economic signals, such as the Dallas Fed's Texas manufacturing index contracting to -8.7, far below the -1.0 forecast. Amid this backdrop, corporate-specific events drove significant divergence. M&A activity was a major theme, with Electronic Arts (EA) surging over 5% following the announcement of a record-breaking $55 billion leveraged buyout. In the semiconductor space, Nvidia (NVDA) climbed over 3% on strong demand, while its new partner Intel (INTC) declined over 3% as analysts noted its turnaround benefits are not expected until 2028 or later. Event-driven volatility was stark, with MoonLake Immunotherapeutics (MLTX) plummeting nearly 90% on disappointing drug trial data, while cannabis stocks like Canopy Growth (CGC) surged over 14% on political commentary from President Trump suggesting a potential regulatory shift.

Key Decisions for Investors

• Investors should monitor the government shutdown outcome closely, as a delay in the jobs report could increase market volatility and postpone anticipated Federal Reserve rate cuts, impacting rate-sensitive assets.
• The divergence between Nvidia's momentum and Intel's long-term recovery prospects suggests a discerning approach to the AI sector is necessary; differentiate between immediate beneficiaries and multi-year turnaround stories.
• Given the extreme price movements in event-driven stocks like MoonLake (MLTX) and Electronic Arts (EA), assess exposure to binary catalysts such as clinical trial results or M&A talks and consider position sizing or hedging strategies to manage risk.
• The rally in cannabis stocks (CGC, TLRY) is highly speculative and tied to political signaling; this position should be managed with an understanding that gains are contingent on a potential drug reclassification that is not yet confirmed.