U.S. stocks showed mixed performance during Tuesday's midday trading, with the Dow Jones Industrial Average rising over 300 points while tech stocks dragged the Nasdaq lower. CoreWeave's disappointing earnings guidance and SoftBank's $5.8 billion divestment of Nvidia shares weighed on AI-related stocks.
The Dow climbed 305.26 points (0.64%) to 47,673.89, while the Nasdaq dropped 185.81 points (0.79%) to 23,341.37. The S&P 500 slipped 15.47 points (0.23%) to 6,816.96.
CoreWeave shares plunged after issuing weaker-than-expected guidance, pressuring AI-related trades. Nvidia retreated following SoftBank's complete exit from the chipmaker, cashing out $5.8 billion. AI stocks have faced sustained pressure recently amid growing valuation concerns.
Monday saw broad market gains as investors anticipated an end to the record-long U.S. government shutdown. The Nasdaq jumped over 2% - its best single-day performance since May 27 - as buyers returned to AI stocks following last week's selloff. The S&P 500 gained 1.5%, while the Dow added nearly 400 points.
The Senate passed a bipartisan funding bill late Monday to conclude the historic shutdown that began October 1. The 60-40 vote included nearly all Republican senators and some Democrats. The bill now moves to the House, where passage would send it to the President for signing.
However, the negotiated deal excluded Democratic demands to extend Affordable Care Act subsidies, instead scheduling a December vote on tax credits. Earlier Monday, the President expressed support for the Republican-negotiated agreement.
House leadership remains cautious about the bill's prospects, refusing to guarantee a December vote on ACA subsidy extensions affecting over 20 million Americans' healthcare costs. The Speaker stated he would neither commit nor rule out such action, while urging representatives to return promptly for a vote.
Investors aggressively bought risk-sensitive stocks Monday that had led last week's declines amid AI sector and economic health concerns. Nvidia surged 5.8%, contributing over a quarter of the S&P 500's gain. Alphabet rose 4%, while Microsoft gained 1.9% to snap an eight-day losing streak.
"Ending the shutdown removes another risk for markets and the economy," said Carson Group strategist Sonu Varghese. "We were approaching the point where missed paychecks would create lasting economic damage through reduced consumption and travel impacts."
Economic data showed U.S. private sector employment fell by an average 11,250 weekly over four weeks ending October 25. October's NFIB Small Business Optimism Index dropped to a six-month low of 98.2, with profit expectations posting their steepest pandemic-era decline. Hiring plans saw their first pullback since May, while pricing pressures eased slightly.