U.S. Stocks Open Higher as Traders Watch Government Shutdown and Fed Comments
U.S. stock markets opened higher on Tuesday, as investors balanced optimism over the artificial intelligence (AI) boom with caution surrounding the ongoing U.S. government shutdown, now entering its second week.
By 09:34 ET (13:34 GMT), the S&P 500 gained 13 points (0.2%), the Nasdaq Composite rose 34 points (0.1%), and the Dow Jones Industrial Average climbed 156 points (0.3%). Both the S&P 500 and Nasdaq had closed at fresh record highs the previous day, lifted by enthusiasm over a new partnership between AMD and OpenAI.
The agreement, which grants AMD a 10% stake in OpenAI in exchange for supplying AI chips, is expected to generate tens of billions of dollars in annual revenue. AMD shares surged 23.7% on the announcement and continued climbing on Tuesday, rising another 6.5%.
Analysts at Capital Economics said they believe the AI stock rally still has room to run. However, Citi analysts warned that the market’s optimism could soon reach its limits, increasing the risk of profit-taking as valuations stretch higher.
Political Uncertainty and Data Delays
The federal government shutdown has delayed the release of key economic indicators, making it harder for investors and Federal Reserve officials to gauge the path for U.S. interest rates. With limited official data available, policymakers have turned to private-sector reports for guidance.
Despite the shutdown, the New York Fed will still release a consumer expectations survey later today, while several Fed officials are scheduled to speak. However, analysts say the lack of new economic data may limit their ability to influence market sentiment.
President Donald Trump said he remains open to negotiating with Democratic lawmakers on healthcare subsidies, hinting at a potential compromise to break the budget impasse in Washington.
Tesla Poised to Unveil More Affordable Model Y
Reports suggest that Tesla (NASDAQ: TSLA) may announce a more affordable Model Y later today. Over the weekend, the automaker teased an upcoming event through two short videos posted on X (formerly Twitter).
Although details remain unclear, media outlets expect Tesla to introduce a lower-priced Model Y SUV, marking its latest push to reach a broader customer base. CEO Elon Musk had previously canceled plans for a $25,000 electric vehicle, but analysts believe this version could be a more accessible model based on Tesla’s existing platforms.
Tesla recently reported record quarterly sales, driven in part by the expiration of U.S. EV tax credits that effectively boosted car prices by $7,500. However, sales are expected to slow through the rest of 2025.
Meanwhile, Ford (NYSE: F) shares slipped after a Wall Street Journal report said a fire at a key supplier may disrupt operations at Ford and other carmakers for several months.
Corporate Movers: Constellation Brands and Dell
Shares of Constellation Brands (NYSE: STZ) jumped over 5% after the beverage maker posted better-than-expected quarterly results. Sales fell in the second quarter but not as sharply as feared, helped by steady beer demand, even amid concerns that Trump’s immigration policies could affect its Hispanic customer base.
Elsewhere, Dell Technologies (NYSE: DELL) raised its long-term growth targets, projecting annual revenue increases of 7%–9% versus its earlier forecast of 3%–4%. The company also expects earnings per share to rise 15% or more annually. Dell reiterated its third-quarter and fiscal-year guidance, citing strong momentum from its AI server business and a robust tech infrastructure portfolio. Dell shares rose 4% on the update.
Gold Hits New Record High
Gold prices climbed to a record high near $4,000 per ounce, supported by safe-haven demand amid political uncertainty in the U.S. and expectations of an upcoming Federal Reserve rate cut.
Markets largely expect the Fed to lower interest rates by 25 basis points at its October 28–29 meeting, following a previous rate cut in September. Lower rates generally boost non-yielding assets like gold, which benefit from reduced opportunity costs.
Additional demand from the People’s Bank of China and growing institutional inflows in Europe and Japan have further strengthened prices. Analysts at ING said ongoing political instability in France and Japan has fueled fiscal worries, increasing gold’s appeal as a global safe-haven asset.
Oil Prices Dip
In energy markets, crude oil prices fell as traders weighed a smaller-than-expected November output hike from OPEC+ producers against fears of a supply surplus heading into year-end.
