Nasdaq retreats amid struggling tech trade, U.S. stocks mixed as government shutdown end nears

[Wall Street in New York City]
JaysonPhotography

Wall Street's major averages were mixed on Wednesday, with the Nasdaq (COMP:IND) turning red, as several big tech stocks lagged. Market sentiment had been growing stronger as the end of the U.S. government shutdown seems near.

The benchmark S&P 500 (SP500 [https://seekingalpha.com/symbol/SP500]) was last +0.1% in late morning trade, while the Dow (DJI [https://seekingalpha.com/symbol/DJI]) was +0.9% and hit an intraday record. The Nasdaq Composite (COMP:IND [https://seekingalpha.com/symbol/COMP:IND]) opened in the green, but was last -0.3%.

AMD (AMD [https://seekingalpha.com/symbol/AMD]) boosted market sentiment -- last +9.9% -- after it made several updates at its financial analyst day on Tuesday, including reiterating [https://seekingalpha.com/news/4520114-amd-ceo-says-ai-market-is-faster-than-anything-weve-seen-before-sees-1t-by-2030] the theme that AI spending is not likely to slow down anytime soon.

However, Skydance (PSKY [https://seekingalpha.com/symbol/PSKY]) -3.6%, Palantir (PLTR [https://seekingalpha.com/symbol/PLTR]) -3%, and Oracle (ORCL [https://seekingalpha.com/symbol/ORCL]) -1.7% were some of the laggards within the S&P 500.

“There are parts of the AI market that have bubble type valuations, but as history tells us, bubbles can last a lot longer than people think. We continue to broaden exposure away from the handful of U.S. chip names most people own to include other parts of the AI story including HVAC, electricity transfer, power generation, and infrastructure names both here and abroad,” said Michael Landsberg, CIO at Landsberg Bennett Private Wealth Management.

“Rather than worrying about AI bubbles, we see other risks, such as not having enough overall AI exposure as an investment theme, or having too much exposure to just a few stocks and not being diversified and thinking that AI is a U.S. only story,” Landsberg added.

The U.S. government shutdown [https://seekingalpha.com/news/4519272-compromise-legislation-to-end-us-government-shutdown-proceeds-in-senate], lasting already 43 days, is poised to come to an end as the Senate passed a spending bill on Monday that has since moved to the House of Representatives for a final vote. The vote is expected to occur Wednesday evening.

“While the markets are pricing the end of the government shutdown, there is an even bigger mountain ahead of us, and that is the resumption of all the economic data that we have missed, including the jobs and inflation data. The market had been flying blind with no data and now as the fog lifts, we will see if market positioning has been correct, and it is still clear sailing or if there is a big repricing necessary,” said Landsberg.

Over the bond market, the 10-year Treasury yield (US10Y [https://seekingalpha.com/symbol/US10Y]) was down 5 basis points to 4.08%, while the 2-year yield (US2Y [https://seekingalpha.com/symbol/US2Y]) fell 2 basis points to 3.58%. Investors are awaiting the results of a $42B, 10-Year Note Auction, coming later in the day.

Wall Street’s broader market averages finished Tuesday's session on a mixed note as investors await updates about the possible end of the U.S. government shutdown.

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