FTSE 100 and S&P 500 circle record highs as US shutdown cools
Global markets sprung back to life on Monday after AI jitters and the US government shutdown helped trigger widespread sell-offs last week.
The S&P 500 – which tracks the 500 leading companies listed on stock exchanges in the United States – jumped over one per cent to 6,804.80p at Wall Street’s opening bell.
The tech-heavy Nasdaq soared 1.6 per cent and the Dow Jones 0.5 per cent.
Meanwhile, by midday London’s blue-chip index was up over one per cent to 9,783.76. Drinks maker Diageo was leading the City stocks after naming a new top boss to lead the firm’s turn-around.
The rallies came amid hope the US government shutdown was finally drawing to a close.
US Senators passed a deal which paved the way for the 40-day deadlock – the longest shutdown on record in – to come to an end.
Republicans hold a 53-47 majority in the Senate and have needed to cross the 60-vote threshold to pass a funding bill.
But there remain a few more mountains to climb for the bill the shutdown to be fully lifted, including a vote in the House of Representatives.
The shutdown has left near 1.4m federal workers on unpaid leave or working without pay.
Still, investors were able to take the news in their stride.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “While the standoff hasn’t turned into the market drag many feared a few weeks ago, the prospect of clarity is still welcome.
“Investors tend to prefer stability and removing this uncertainty allows focus to shift back to earnings season, which is where the real story lies.”
But Britzman added while it was enough to “keep sentiment on the front foot,” the tone was more so “relief than euphoria”.
Bubbling AI fears
On the US market, chipmaker Nvidia was a top riser in early trading advancing over three per cent to 194.59p.
Its AI market leading peer Broadcom was also up two per cent to 357.02p as the calming shutdown nerves put investors in a risk-taking mood.
It followed a week of heavy losses for Wall Street, suffering some of their worst performances since President Donald Trump spooked investors across the globe with his ‘Liberation Day‘ tariffs.
The S&P 500 and Dow Jones each lost over one per cent whilst the Nasdaq lost three per cent over the course of the week – its worst five-day period since the week ending April 4 where it plunged 10 per cent.
Total losses for AI-related firms topped over £750bn. Chipmaker Nvidia fell nearly ten per cent over the course of the week, a bruising of over £350bn. Meta – the owner of Facebook, Whatsapp and Instagram – lost near £68bn.
It came after warnings from top industry names and a damning assessment from a stock picker famed for predicting the Global Financial Crisis.
In London, stocks were able to curb the severe losses related to tech sell-offs, due to the index being heavily weighted towards healthcare and oil stocks.