Stocks driven lower as government shutdown and AI concerns weigh heavily

It is a risk-off end to the week thanks to worries about stock valuations and the US government shutdown, says Chris Beauchamp, Chief Market Analyst at investing and trading platform IG.

Stocks slip further into the red on valuation & shutdown worries

A see-saw week is ending with the sellers in control, marking a change from the theme of recent months. What began as jitters about AI valuations has turned into a broader selloff as the lack of US economic data begins to give investors palpitations. Today should have been payrolls day, but for the second month in a row traders have been without this monthly update, leaving them increasingly in the dark. The government shutdown shows no sign of ending either; since it is estimated to be costing the US economy $15 billion a week, this is turning from an irritation into a major concern.

Gold struggles at $4000

Gold sailed through $4000 on its first try a month ago, but this time around it continues to stumble at the psychological level. The past week has seen repeated attempts to break higher, but while the metal has found plenty of support, it lacks the strength to push higher, or the fundamental news catalyst that might cause a breakout. Both bitcoin and ether have struggled this week too, suggesting broader reticence about pushing these assets higher.