To The Moon

Shutdown Fatigue, Market Momentum

Wall Street

The government shutdown stretched into a new week, but Wall Street barely blinked.

• $S&P 500(.SPX)$ : +0.4%, 32nd record close of 2025

• $NASDAQ(.IXIC)$ : +0.7%, 31st record close

• Dow Jones Industrial Average: -0.1%, just shy of its record high

• Gold and Silver: Both hit new all-time highs

With earnings strong and investor confidence high, he calls the current rally “self-fulfilling”. Historical data supports his view: longer shutdowns have often preceded stronger rebounds.

Valuations Stretch Higher

With limited government data and no major earnings reports this week, investors have focused on momentum? and that’s pushing valuations higher.

• The S&P 500’s forward P/E ratio has surged from 18 to 22.8 in six months, the sharpest expansion since 2020, notes Callie Cox of Ritholtz Wealth Management.

• Still, opportunities remain beneath the surface, reflecting extreme concentration in a few mega-cap names.

Bottom line: The shutdown lull could be a stockpicker’s market, as dispersion between high-fliers and laggards widens.

Earnings Season: “You Get What You Pay For”

After an unusually strong September, stocks’ best in 15 years, the spotlight now shifts to third-quarter earnings, which begin next week with the big banks.

• Wall Street expects 8% year-over-year profit growth, the first quarter since 2021 in which analysts raised estimates mid-quarter.

• AI remains the main driver, with Big Tech responsible for more than two-thirds of the S&P 500’s Q3 gains. $NVIDIA(NVDA)$ $Microsoft(MSFT)$ $Apple(AAPL)$

• Deutsche Bank’s Binky Chadha is forecasting 10.7% growth, suggesting strategists may still be underestimating corporate resilience as “tariff fog” and macro uncertainty fade.

If profits deliver, the market’s lofty valuations could find their justification. If not, the phrase “you get what you pay for” may be tested.

Ahead This Week

• Tuesday: McCormick reports earnings

• Monday: Amazon’s Prime Big Deal Days kick off (Oct. 7–8)

• NY Fed’s Consumer Expectations Survey: September data expected; 1-year inflation expectations stood at 3.2% in August

Takeaway

Washington’s gridlock is proving no match for Wall Street’s momentum. With investor confidence intact and AI enthusiasm still fueling the rally, the near-term focus shifts from politics to profits. The test begins next week, when earnings season starts to separate momentum from fundamentals…

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This summary is for informational purposes only and does not constitute financial advice. Investors should conduct their own research before making investment decisions.