Wall Street falls despite signs US could emerge from government shutdown

The US stock market ended a volatile trading week with mixed results on the last session of the week on November 7, when signs that the US could escape the prolonged government shutdown helped investors to be less cautious, although concerns about the economic outlook and high valuations of technology stocks still dominated the market.

Activities at the New York Stock Exchange, USA. Photo: THX/TTXVN

At the end of the trading session on November 7, the Dow Jones index increased 74.8 points (0.16%) to 46,987.10 points, while the S&P 500 increased 8.48 points (0.13%) to 6,728.80 points. Meanwhile, the Nasdaq Composite decreased 49.45 points (0.21%) to 23,004.54 points. All three indexes recovered from their sharp declines earlier in the session, after information appeared showing that the US Congress was getting closer to ending the longest government shutdown in history.

According to sources in Washington, Senator Chuck Schumer – the Democratic leader in the Senate – has proposed to the Republicans a plan to reopen the government , including providing short-term funding in exchange for a one-year extension of tax incentives under the Affordable Care Act. The Senate is expected to vote on November 7 (local time) to pass this temporary measure.

Analyst Terry Sandven of US Bank Wealth Management said: “If the budget crisis is resolved, this will be an important factor to improve market sentiment, because US stocks are at historical peaks and the safety margin is very narrow.”

However, uncertainty still gripped Wall Street after the US government shutdown lasted for weeks, causing statistical agencies to stop releasing official data, forcing investors and the US Federal Reserve (Fed) to "walk in the fog" when assessing the economic outlook. A survey report by the University of Michigan released the same day showed that the US consumer confidence index fell to a more than three-year low in November, while assessments of current conditions hit the most pessimistic level since the survey was launched.

Part of the reason is labor market concerns, with Challenger, Gray & Christmas reporting the highest number of layoffs in October for the same period in 22 years. The Labor Department was supposed to release its October nonfarm payrolls report on November 7, but it was delayed due to the government shutdown. Economists had expected a decline of about 60,000 jobs in October and an increase in the unemployment rate to 4.5%.

In the stock market, the market was divided. Microchip Technology fell 5.2% after forecasting lower-than-expected revenue. Tesla lost 3.7% despite shareholders approving the largest compensation package in history for CEO Elon Musk. By contrast, Expedia rose 17.6% on strong results, while Block fell 7.7% and Take-Two Interactive lost 8.1% after delaying the release of Grand Theft Auto VI until November 2026.

For the week, all three major Wall Street indexes fell, with the Nasdaq losing about 3%, marking its biggest weekly decline since early April 2025, as investors worried that valuations of technology stocks, especially those related to artificial intelligence (AI), were far beyond their real value. The S&P 500 and Dow Jones also saw declines of more than 1% last week.

Despite some positive signs of an end to the budget crisis, investors remain cautious about the short-term outlook for the US economy. The prolonged government shutdown has disrupted many industries, from airlines to trade, and obscured signals about the Fed's monetary policy.

US Transportation Secretary Sean Duffy said on November 5 that he ordered a 10% reduction in flights at 40 major US airports starting November 7, unless a deal is reached to end the federal government shutdown.

The government shutdown, now in its 36th day and the longest in U.S. history, has forced 13,000 air traffic controllers and 50,000 Transportation Security Administration employees to work without pay, exacerbating staffing shortages, causing widespread delays and long security lines at airports.

US airlines on November 7 canceled hundreds of flights after the Federal Aviation Administration (FAA) ordered cuts due to the record-long government shutdown.

The flight cuts come as air traffic controllers have not received paychecks due to the government shutdown. A shortage of air traffic controllers is disrupting flights at many major US airports, causing inconvenience to both passengers and airlines.

On November 7, a shortage of air traffic controllers caused many flight delays at many major airports, including Newark Liberty International Airport in New Jersey, San Francisco International Airport and Hartsfield-Jackson International Airport in Atlanta.

The abrupt flight cuts this week have forced airlines to scramble to adjust schedules and ensure crews are in place, even at the last minute. However, the flight reductions at 40 major U.S. airports do not affect international flights, only domestic flights.

According to experts, if the US Congress soon reaches an agreement to reopen the government, this will be an important psychological boost to help US stocks stabilize after a volatile week. However, risks from high valuations, a weak labor market and lack of data transparency will continue to weigh on investor sentiment in the coming weeks./.

Source: https://baotintuc.vn/kinh-te/pho-wall-giam-diem-bat-chap-tin-hieu-my-co-the-thoat-khoi-tinh-trang-chinh-phu-dong-cua-20251108112104825.htm