S&P 500 extends rally as AI stocks lift momentum despite U.S. shutdown risks

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S&P 500 rally builds

Highlights

- S&P 500 trades above 6,700 as AI-led momentum continues to drive gains

- Nvidia, AMD, and Intel post strong advances, boosting the technology sector

- U.S. shutdown clouds data visibility, but technical trend remains constructive

The index remains firmly positioned within its long-standing uptrend, supported by higher lows and consistent respect for its short- and medium-term moving averages. Price action is consolidating just above 6,700, with the 20-day EMA at 6,617 now acting as immediate support. Below, further demand zones sit at 6,490 and 6,312, defined by the 50- and 100-day EMAs.

S&P 500 price dynamics (Source: TradingView)

Upside momentum targets the 6,750–6,800 band, which represents the next area of resistance. Volume dynamics remain supportive, with the On-Balance Volume indicator trending higher in tandem with price. RSI readings, elevated but not yet stretched, suggest the rally remains constructive without immediate signs of exhaustion.

Market drivers

Artificial intelligence remains the primary engine of the rally. Nvidia advanced 0.9%, AMD gained 3.5%, and Intel surged 3.8% on Thursday, fueling optimism across the semiconductor complex. Investor enthusiasm was bolstered by OpenAI’s $6.6 billion share sale, valuing the firm at $500 billion, and a major supply partnership with South Korean chipmakers. The developments reinforced expectations that AI-driven capital expenditure will continue to underpin corporate earnings growth.

At the same time, the U.S. government shutdown entered its second day, injecting uncertainty into the macro backdrop. The shutdown has halted the release of key economic data, including September’s nonfarm payrolls, forcing investors to rely on private-sector reports that already show labor market softness. President Trump’s threat of federal job cuts escalated tensions, raising the risk of prolonged disruption if the impasse persists.

S&P 500 short-term outlook

The S&P 500 remains technically strong, with the near-term focus on the 6,750–6,800 resistance bands. A decisive breakout above this zone could accelerate gains toward 6,900, while failure to hold above 6,617 risks a short-term retracement toward 6,490.

The index sits at the intersection of two forces: surging AI-driven corporate strength and mounting political uncertainty. While the technical structure favors continued upside, the ongoing government shutdown and delayed data flow may temper risk appetite in the weeks ahead.

In earlier coverage, we highlighted how AI-related capital inflows have reshaped equity market leadership, with semiconductors and cloud infrastructure forming the backbone of the rally. That trend remains firmly in place, even as political risks introduce short-term volatility.

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