New York, 3 October 2025 – U.S. stocks faltered on Thursday after hitting fresh intraday record highs, with both the S&P 500 and the Nasdaq Composite slipping as investors locked in gains against a backdrop of fragile sentiment, an ongoing government shutdown, and muted economic data.
At 11.52am ET, the Dow Jones Industrial Average fell 71.44 points, or 0.15%, to 46,369.66, the S&P 500 slipped 9.54 points, or 0.14%, to 6,701.35, while the Nasdaq Composite managed a modest gain of 25.95 points, or 0.11%, to 22,781.11. Earlier in the session, the S&P 500 touched an intraday high of 6,731.94, while the Nasdaq surged to 22,900.6, before momentum faded.
Market strategists highlighted how stretched valuations are amplifying volatility. The S&P 500’s forward price-to-earnings ratio has climbed to 23.1, its highest since September 2020, leaving equities vulnerable to profit-taking. “If the shutdown is going to last longer than a few days, then you could see a little bit more volatility around equities,” said Anthony Saglimbene, chief market strategist at Ameriprise Financial.
Tesla shares, despite initially rising on stronger-than-expected quarterly deliveries, fell nearly 2% as analysts flagged looming risks from the withdrawal of the US$7,500 federal tax credit for EV buyers. The S&P healthcare sector also slipped 0.4%, halting a four-day rally.
Meanwhile, semiconductor stocks provided a counterweight. Nvidia gained 1%, Broadcom 2%, and Advanced Micro Devices 3.2%, propelling the broader semiconductor index to record highs and lending resilience to the Nasdaq. Still, consumer discretionary shares fell 0.7%, becoming the biggest drag on the S&P 500.
Credit rating giants Equifax and TransUnion tumbled 9.2% and 12%, respectively, after FICO announced a new program allowing mortgage lenders to access credit scores without relying on the bureaus. FICO shares surged nearly 19%, topping the S&P 500 on Thursday.
In energy, Occidental Petroleum dropped 5.9% after confirming plans to sell its petrochemical division to Berkshire Hathaway for US$9.7 billion, a deal underscoring Warren Buffett’s long-term pivot toward industrial and commodity-linked assets.
Labor data added to caution. Challenger, Gray & Christmas reported that U.S. employers announced fewer layoffs in September, but overall hiring plans are at their weakest since 2009. This followed a softer-than-expected ADP employment report earlier in the week. “Both are showing the job market is really drying up,” said Joe Mazzola, head trading and derivatives strategist at Charles Schwab.
Breadth was weak: declining issues outnumbered advancers by 1.78-to-1 on the NYSE and 1.25-to-1 on the Nasdaq. The S&P 500 logged 31 new 52-week highs and 10 new lows, while the Nasdaq posted 108 new highs against 61 new lows.
Investor Insights for Asia
For Asian investors, the session highlighted the delicate balance between optimism over U.S. tech momentum and the fragility of broader market sentiment. The semiconductor surge underscores that AI-linked hardware and infrastructure remain market leaders, suggesting spillover strength for Asian chipmakers in Taiwan, South Korea, and Malaysia.
At the same time, Tesla’s decline and the rollback of EV tax credits reflect policy headwinds that may weigh on global EV supply chains, potentially dampening sentiment toward related Asian automakers and battery producers.
The labor market signals, with hiring intentions at their weakest since the Global Financial Crisis, reinforce expectations of a softer Fed path, supportive for liquidity in emerging markets but a double-edged sword if recession fears intensify.
For Asia, the lesson is clear: U.S. momentum remains tech-driven, but vulnerabilities in discretionary demand, policy shifts, and labor weakness warrant caution. Investors may continue to favor selective exposure to semiconductors and defensives, while monitoring macro risks tied to U.S. fiscal uncertainty.
