President Donald Trump signed a short-term spending bill Wednesday night that reopens the federal government through January 30. Investors, traders and speculators are assessing the implications of the longest government shutdown in U.S. history, which includes the resumption of regular collecting and reporting of economic data.
Meanwhile, in addition to its leader providing another quarterly update on the AI revolution next week, a number of important retailers will offer a look at the health of the American consumer.
The usual sectors reflected a risk-off mood – communication services, technology and consumer discretionary stocks were three of the biggest losers. Utility stocks were also among the worst of the worst, but that price action mirrors renewed questions about whether we're in an AI bubble. Indeed, all that potential computing power requires a lot of electricity.
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Nvidia (NVDA) was down 3.6%, as its turn next Wednesday on the earnings calendar marks a defining event for the rest of 2025. Tesla (TSLA) shed 6.6%.
Other Magnificent 7 stocks suffered similar fates: Alphabet (GOOGL) lost 2.8%, Amazon.com (AMZN) 2.7%, Microsoft (MSFT) 1.5% and Apple (AAPL) 0.2%. Meta Platforms (META), meanwhile, eked out a 0.1% gain after Wedbush added the Facebook and Instagram parent to its Best Ideas List.
And Constellation Energy Group (CEG) – one way to invest in a nuclear revolution driven by AI electric power needs – was down 5.2%.
But Cisco Systems (CSCO) bucked the trend, rising 4.6% and earning multiple analyst upgrades after reporting expectations-beating fiscal 2026 first-quarter results on Wednesday – all of it a function of the AI-driven demand cycle.
"The market is hungry for economic data now that the government is reopened," writes Louis Navellier of Navellier & Associates, who says non-government data shows "a fairly ugly" employment situation marked by low hiring and large layoffs. "While a weakening employment picture should push the Fed to cut in December," he says, "there may be inflation concerns that give them pause."
As Navellier notes, "A robust outlook by [Nvidia] CEO Jensen Huang is key to a strong year-end for the stock market."
At the closing bell, the blue chip Dow Jones Industrial Average was down 1.7% at 47,457, the broad-based S&P 500 had fallen 1.7% to 6,737, and the tech-heavy Nasdaq Composite was off 2.3% at 22,870.
DIS is a streaming stock
Walt Disney (DIS, -7.8%) was down big Thursday after management reported fiscal 2025 fourth-quarter results. Traffic at its U.S. amusement parks was down by 1%. The Dow Jones stock was also hampered by an ongoing dispute with Alphabet's YouTube unit, for which no end is in sight.
Disney posted earnings of $1.11 per share, down from $1.14 a year ago and above the $1.05 Wall Street consensus. Revenue slipped to $22.46 billion and came up short of analysts' expectations for $22.76 billion. Operating income for its entertainment segment was down 35% on declining TV advertising and box-office sales.
Disney did see profit growth for its streaming and experiences segments, as Disney+ added 3.8 million subscribers and overseas theme parks enjoyed strong foot traffic. And management reiterated guidance for double-digit EPS growth in fiscal 2026 and 2027.
Disney continues to negotiate a new streaming agreement with YouTube. Management said in a statement that it "cannot predict how long this service blackout will last or reasonably estimate the adverse impact on our results of operations."
About next week
"The market may be near all-time highs," writes independent analyst Jeff Macke, "but in terms of the economy, America is driving in the dark with the headlights off and the gas pedal to the floor."
As Macke explains, the gap on the economic calendar wasn't "magically fixed when the shutdown officially ended last night." Questions remain about when airlines will resume full operations, for example, and whether October economic reports will ever be released.
"Which is the bad news," the analyst concludes. "The good news is we're about to find out everything we need to know about the consumer, for better or worse."
Macke is referring to next week's earnings calendar, which, in addition to Nvidia, features Home Depot (HD, -0.8%), Lowe's (LOW, -1.4%), TJX (TJX, -0.5%), Target (TGT, -1.4%), Gap (GAP, -2.5%) and Walmart (WMT, -0.8%).
Walmart, of course, is both the biggest retailer and the biggest private employer in the world. We'll see what its numbers and its managers say before the opening bell next Thursday, the morning after Nvidia reports.
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