UNITED STATES, 03 October 2025 – Wall Street’s main indexes climbed to intraday record highs on Friday, as growing expectations of a near-term Federal Reserve interest-rate cut lifted market sentiment despite ongoing disruption from the U.S. government shutdown.
The shutdown, which began on Wednesday, has delayed the release of crucial economic data, including the widely anticipated nonfarm payrolls (NFP) report originally scheduled for Friday. Investors instead leaned on alternative indicators pointing to a softening labor market, reinforcing bets that the Fed could move ahead with a rate cut in October.
Market Drivers
“The market’s focused on a couple of different things instead of the shutdown. One is the AI optimism that we’ve seen over recent days, and then the data that came out this week is pretty supportive of the Fed being able to cut rates,” said Veronica Willis, global investment strategist at Wells Fargo Investment Institute in New York.
At 10:09 a.m. ET, the Dow Jones Industrial Average (.DJI) rose 274.53 points, or 0.59%, to 46,794.89. The S&P 500 (.SPX) gained 12.09 points, or 0.18%, to 6,727.44, while the Nasdaq Composite (.IXIC) slipped 7.27 points, or 0.03%, to 22,836.64.
The S&P 500 technology sector (.SPLRCT) advanced 0.2%, while healthcare stocks (.SPXHC) surged 1.3%, extending the week’s rally. Humana rose 5.6% and Danaher climbed 4.2%, both among the session’s strongest performers.
Meanwhile, communication services stocks (.SPLRCL) dragged lower, with Meta Platforms down 1.2% and Alphabet falling 1.4%, weighing on the Nasdaq.
Bank stocks helped buoy the Dow, with Goldman Sachs gaining 0.5% and JPMorgan up 1%.
Rate-Cut Bets and Fed Signals
Adding to momentum, BofA Global Research revised its forecast on Friday, now expecting the Fed’s next 25-basis-point rate cut in October instead of December, citing weakness in labor data.
Still, some Fed officials struck cautious notes. Chicago Fed President Austan Goolsbee said he was hesitant to commit to a series of cuts, given inflation remains above the Fed’s 2% target.
Fresh economic data from the Institute for Supply Management showed non-manufacturing activity fell to 50 in September, below economist expectations of 51.7, tempering some early gains.
New York Fed President John Williams noted that central banks must prepare for “unpredictable changes,” while markets awaited remarks later in the day from Dallas Fed President Lorie Logan and Fed Vice Chair Philip Jefferson.
Stock Highlights
In corporate news, Applied Materials fell 2.9% after warning of a potential $600 million hit to fiscal 2026 revenue due to semiconductor export restrictions.
By contrast, USA Rare Earth surged 19.6% after CEO Barbara Humpton told CNBC the company was “in close communication” with the White House.
Market breadth was positive, with advancing issues outnumbering decliners by a 2.59-to-1 ratio on the NYSE and 2.43-to-1 on the Nasdaq. The S&P 500 registered 31 new 52-week highs and one new low, while the Nasdaq Composite recorded 110 new highs and 17 new lows.
