tl;dr
As the government shutdown disrupts economic data, investors face uncertainty. The Fed and Treasury remain active, while key earnings and OpenAI's DevDay could shift market trends. Despite challenges, the S&P 500 hits record highs, but concerns about AI and tech bubbles linger.
As the federal government remains shut down, investors are navigating a landscape of uncertainty, with many key economic reports delayed or uncertain. The shutdown has disrupted the release of data from agencies like the Labor Department and the Census Bureau, leaving a gap in critical economic insights. However, the Federal Reserve and Treasury Department are expected to proceed with their schedules, offering some stability. Fed Chair Jerome Powell is set to deliver a pre-recorded address at a conference on community banks, while Treasury Secretary Scott Bessent and Fed officials will participate in discussions. The Fed’s recent decision to cut interest rates in 2025 remains a focal point, with new member Stephen Miran pushing for more aggressive rate reductions. Investors will closely watch for clues about the central bank’s future direction in the minutes from its most recent meeting.
Corporate earnings reports from major consumer-facing companies will also take center stage this week. Constellation Brands, parent to Corona and Modelo, kicks off the earnings season on Monday, though the company has already revised its outlook amid concerns over tariffs and declining alcohol consumption. PepsiCo, Delta Air Lines, and Levi Strauss & Co. are scheduled to report later in the week, with analysts monitoring their performance amid ongoing challenges like supply chain pressures and shifting consumer demand. Meanwhile, Amazon’s Prime Big Deal Days event on October 7-8 is expected to draw attention, as retailers like Walmart also launch their own sales promotions. On the tech front, OpenAI’s DevDay conference could unveil new developments from the world’s most valuable startup.
The week’s calendar highlights a mix of scheduled economic data and Fed speeches. Consumer credit data for August and the Federal Open Market Committee’s meeting minutes are set for release, though several key reports, including the U.S. trade deficit and initial jobless claims, may be delayed. Fed officials, including Atlanta Fed President Raphael Bostic and Minneapolis Fed President Neel Kashkari, will speak throughout the week, providing additional context on monetary policy.
Despite the backdrop of a government shutdown, the S&P 500 closed at a record high on Friday, reflecting resilience in the market. However, concerns about potential bubbles in AI and megacap tech stocks are growing, with a recent survey indicating a mix of optimism and skepticism among investors. As the week unfolds, the interplay between delayed data, corporate performance, and central bank signals will shape market sentiment, offering both challenges and opportunities for investors.