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Stocks are set to open lower after the S&P 500 and Nasdaq hit new highs, but the Russell 2000 small-cap index continues on its trajectory higher, closing above 2,500 for the first time ever. Despite AI stocks like AMD surging on a massive deal with OpenAI, valuation concerns remain over giants like Nvidia, pushing investors toward small-caps. The Russell 2000 has outperformed the S&P 500 since April, gaining 35% compared to 30%, as its broader base of coverage reduces correction risks.
Stocks continue to press higher, but the biggest tech names eased back on Friday on concerns of valuation and AI's ROI. Instead, we're seeing a rotation into small cap stocks that have long lagged behind their larger brethren in the high-interest rate environment. From the stock market's April dunking over tariffs, small-caps are beating large-caps by an increasing margin. Gold remains as lustrous as ever and is jumping today as traders seek out safe-haven assets.
Stocks hit new records despite a weakening labor market and government shutdown. Global markets, especially in Asia, rose after AI deals involving Hitachi, Fujitsu, OpenAI, and Nvidia. The S&P 500 marked its 27th record since June amid "bubble" concerns and stretched valuations, making protecting your downside risk crucial.
Despite a U.S. government shutdown, stocks rose modestly, aligning with historical S&P 500 gains of 17% in the year following such events. Delayed jobs data clouds Fed rate cuts, but ADP's surprise 32,000 job loss eases concerns. Gold surged to $3,900 an ounce while silver rose to $47 an ounce, driven by central banks and ETFs, potentially topping asset class performance again.
The government shut down after a budget impasse, causing stock futures to dip slightly with minimal long-term impact. Millions of workers face unpaid furloughs but will receive back pay. President Trump may use the shutdown to fire workers, though legal challenges are expected. The delayed BLS jobs report shifts focus to ADP’s limited private-sector data.
Stock indexes remain at record highs despite tariffs, geopolitical tensions, and cautious Federal Reserve policies. However, falling oil prices, surging gold and silver, and central banks' flight to safety signal a looming recession. Mixed U.S. economic signals and uncertain interest rate cuts heighten concerns, should prompt investors to prepare for an economic downturn.
This week’s stock picks spotlight Oklo as a breakout AI nuclear trade, Alibaba as China’s AI chip leader, First Majestic Silver targeting $15, Kellanova flashing a defensive dividend setup, and Kroger breaking down with risk to $50.