Stocks Up Despite Shutdown as Oil, Yields Retreat

Published as of: October 10, 2025, 9:13 a.m. ET

(Friday market open) Stocks edged up early, on pace for another positive week as Wall Street braces for next Tuesday's results from big banks. Those could provide a better sense of how the economy is doing—something investors lack now thanks to the data outage. September inflation data would be the next victim if the government shutdown persists.

"We've got a standoff," said Michael Townsend, managing director, legislative and regulatory affairs at Schwab. "And how and when it will end is, frankly, anybody's guess. One thing to watch is that there are some informal talks going on behind the scenes among Republican and Democrat senators about some kind of deal. Right now, those talks do not include the leadership of either party, but if there's a breakthrough among this informal group, I expect leaders of both parties would get behind it."

The shutdown could affect October's jobs report, because the government collects data the first 12 days of the month.  Stocks slumped across most sectors Thursday, still near record highs, and the University of Michigan's preliminary October consumer sentiment report bows at 10 a.m. ET today. Analysts expect a headline of 54.5, according to Briefing.com, down from the prior 55.1 and near the bottom of the historic range. As always, check inflation expectations, especially after the New York Fed reported an increase earlier this week. Treasury yields dropped today along with crude oil, possibly smoothing the path for stocks.

1. Shutdown impact muted…for now: Stocks hit new record highs this week as investors seem to think the shutdown will have a quick resolution. Still, it's important to consider the economic impact if that doesn't happen. Any sign that it's begun to affect consumer spending, especially with hundreds of thousands of federal employees going without pay, could begin to have a negative market impact. That ripple effect could show up in weaker retail sales, slower growth, slower demand, and ultimately a declining gross domestic product, or GDP. Today is the first day federal workers won't get their paychecks.
    
2. Broad-based rally advances on AI-driven euphoria: The rally, meanwhile, is occurring in multiple asset classes at once, including equities, gold, bitcoin and even the moribund U.S. dollar, which began to climb this week. One thing that could slow the AI-and rate-cut-driven rally is if the Fed hints that lack of data could force it to keep rates steady for longer. But Fed Governor Chris Waller told CNBC this morning he believes rates need to be cut, becoming the latest policy maker to express that view. And Bloomberg reported that the Bureau of Labor Statistics is bringing staff back to get next week's inflation reports out, perhaps not on schedule but in time for the Fed meeting. Other data that might help investors next week in the absence of official numbers include Empire State Manufacturing, the Philadelphia Fed Index, and weekly mortgage statistics.
    
3. Freight earnings roll in next week amid fresh concerns: AI may dominate the news cycle, but people still need things delivered and that often means trucks or trains. The Dow Jones Transportation Average ($DJT) has been stalled most of the year, and Wednesday saw a downgrade to FedEx (FDX) from JPMorgan Chase, which said recent channel checks in a segment called "less-than-truckload" raised concerns. That's a reference to multiple businesses sharing space on a single truck. FedEx reported late last month but focus now turns to reports next week from J.B. Hunt Transport Services (JBHT) and CSX (CSX). The freight sector faces headwinds stemming in part from pressure on delivery volumes, Barron's reported recently. International business volumes dropped for FedEx in its most recent quarter, and new U.S. tariff policies are chipping away profits across the freight arena. On the positive side, fuel costs remain relatively low. Earnings from CSX next Thursday could attract more interest than usual after the company replaced its CEO late last month in a surprise move that media reports said could reflect pressure from an activist investor.

• Applied Digital (APLD), a digital infrastructure provider, soared more than 28% after it reported late Thursday and easily beat analysts' estimates with a much narrower-than-expected loss. Shares have been on the upswing since early summer after Applied Digital and CoreWeave (CRWV) signed two long-term lease agreements for AI data centers.
   
• Levi Strauss (LEVI) plunged nearly 7% in pre-market trading despite what appeared to be strong quarterly results and guidance that exceeded expectations. The company raised its annual forecast, citing strong demand.
   
• Micron (MU) fell more than 2% Thursday, hurt by Samsung's announcement that its high-bandwidth memory chips have received approval for usage by Nvidia (NVDA). Micron competes with Samsung in the high-bandwidth memory chip market and is an Nvidia supplier. Nvidia made new all-time highs yesterday, helped in part by September revenue data from Taiwan Semiconductor Manufacturing (TSM) that spoke to strong demand.
   
• Oracle (ORCL), which slumped earlier this week on a report that its margins on Nvidia chips were low, rebounded 3% Thursday as two Wall Street analysts initiated coverage with positive ratings. Baird believes the company is well positioned to benefit from the accelerating spend on AI infrastructure as well as convergence of AI, data and use cases that will emerge from the move from training to inference.
   
• Stocks in Japan fell 1% Friday as the leading political coalition collapsed, threatening Sanae Takaichi's bid to become the country's first-ever female prime minister, Barron's reported. Her victory in last week's election had hurt the yen, which fell to seven-month lows on ideas she'd support fiscal stimulus and oppose rate hikes. The dollar—which had risen on that election news—pulled back this morning.
   
• Nvidia climbed another 0.7% early today and remains at record highs. The U.S. recently approved several billion dollars' worth of Nvidia chip exports to American customers to be used in projects in the United Arab Emirates, Bloomberg reported.
   
• Qualcomm (QCOM) fell 1% early today as China launched an investigation into the chip company for suspected violations of the country’s antimonopoly law, Barron's reported.
   
• The 10-year U.S. Treasury note yield fell more than five basis points early today, edging below 4.10% and remaining under its 50-day moving average of 4.18%. U.S. yields appeared to follow global yields down, without much fundamental news driving the move. However, lower yields could support stocks if they last.
   
• Crude oil (/CL) fell 1.5% to $60.57 per barrel as a ceasefire in Gaza took hold, reducing the risk premium. Last week's four-month intraday low of $60.40 is a level to watch.
   
• Futures trading builds in 95% chances of a rate cut at the October 28–29 Fed meeting, according to the CME FedWatch Tool.
   
• Technicals still look encouraging for the S&P 500 index, as each test of the 20-day moving average has held going back to late-April. The 20-day average is now near 6,669.

Shutdown implications assessed: In Schwab's new OnInvesting podcast, my colleagues Chief Investment Strategist Liz Ann Sonders and Chief Fixed Income Strategist Kathy Jones discuss the implications of the shutdown on key economic indicators and government data. Investors can glean Fed data for information on the inflation backdrop, and purchasing managers indexes are another place to look for economic updates, they note.

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The Japanese yen has dropped rapidly versus the dollar after last weekend's Japan election went to a candidate who favors more stimulus and generally opposes rate hikes. This has the yen at 153 per dollar, well off its peak of 139 back in late April when tariff pressure weighed on the greenback. It's also below a long-term support level near 151 last tested in early August that stretches back to late March (red line), which could mean an attempt at the 2025 dollar-yen low of 158.87. A weaker yen and stronger dollar can make the price of U.S. goods more expensive overseas, hurting U.S. sectors like materials and info tech that have major foreign exposure.

Check out the investors' calendar for a summary of the top economic events and earnings reports on tap this week.

October 13: No major data or earnings expected.
October 14: Expected earnings from JPMorgan Chase (JPM), Johnson & Johnson (JNJ), Wells Fargo (WFC), Goldman Sachs (GS), Citigroup (C), BlackRock (BLK), Domino's Pizza (DPZ), and Albertsons (ACI).
October 15: September CPI and core CPI, and expected earnings from ASML (ASML), Bank of America (BAC), Morgan Stanley (MS), Abbott Labs (ABT), Progressive (PGR), PNC (PNC), United Airlines (UAL), and JB Hunt (JBHT).
October 16: September PPI, September core PPI, September retail sales, and expected earnings from Taiwan Semiconductor (TSM), Marsh & McLennan (MMC), U.S. Bancorp (USB), Infosys (INFY), Travelers (TRV), and CSX (CSX).
October 17: September housing starts and building permits and expected earnings from American Express (AXP), Truist (TFC), SLB (SLB), State Street (STT), Fifth Third Bancorp (FITB), and Regions Financial (RF).