Mood was not necessarily great in the early hours of trading across the Pacific after Trump’s threat to fire thousands of federal employees if the government shutdown drags on. And the government shutdown doesn’t sound like it will end soon, as Democrats are pushing for the extension of Affordable Care Act subsidies that will expire in a few months, while Republicans don’t want to move ahead without securing funding. Bets on Polymarket suggest that this shutdown could last between 10 to 29 days – potentially becoming the second-longest in US government history – something you could barely guess by looking at the market’s performance.

Yes, the US 10-year yield flirted with the 4% mark on some safe-haven inflows and the US dollar remains offered into its 50-DMA, but the major US indices barely blinked! The S&P 500 and Nasdaq both hit fresh ATHs yesterday, boosted by OpenAI’s secondary share sale that pushed the company’s valuation to around $500bn. Employees were allowed to sell up to $10bn worth of shares, but they only sold $6.6bn – meaning a large chunk of shareholders preferred to hold rather than sell at current prices. That signals they expect the company to grow bigger – which is understandable.

As such, OpenAI has become one of the world’s most valuable startup (overtaking Elon Musk’s SpaceX). The company reportedly expects to make about $20bn in recurring revenue by the end of the year, giving it a valuation of ~25x sales. That’s high, but not shocking given its reach and potential, and lower than many tech startups trade at.

Since OpenAI isn’t listed, the news echoed across related sectors. Microsoft and Nvidia both have exposure to OpenAI – and Nvidia will also supply chips for its massive data center project. Appetite for Microsoft was soft yesterday, but Nvidia notched another record high – following rallies in SK Hynix and Samsung on similar news that OpenAI will use their chips in upcoming US data centers. Elsewhere, AMD jumped 3.5% on news of teaming up with Intel. As such, VanEck’s Semiconductor ETF hit a fresh high. Happy days.

Valuations are high, and some investors wonder whether this is another tech bubble. But a bubble – by definition – isn’t a bubble until it bursts. That leaves global investors with an unbearable FOMO – fear of missing out on a further rally – which keeps valuations elevated. Prospects of multiple Federal Reserve (Fed) rate cuts in the coming months also help support risk assets.

Now speaking of that, markets are pricing in two more Fed rate cuts before year-end, but the Fed needs data to confirm that the US economy requires these cuts. The data that will determine this is the jobs data – because that’s where weakness is most apparent as GDP grew 3.8% last quarter and the Fed’s preferred inflation gauge is still trending near 3% (above its 2% target). So it’s a bit of a shame that the BLS won’t release the September jobs report today because the government is shut down.

Instead, private data fills the gap. ADP reported job losses of 32k on Wednesday, keeping Fed doves in charge of the market. Meanwhile, Challenger job cuts fell 25% YoY, giving mixed signals about the labour market’s heath. Consequently, the weak ADP euphoria will soon fade, and official data should arrive sooner rather than later to tell investors whether the US really needs those two rate cuts.

In the meantime, ISM non-manufacturing data will be in focus before the weekly closing bell. It won’t replace the good, old jobs report, but a softer-than-expected set could give Fed doves a hand, keeping US yields and the dollar under pressure while supporting equities. A strong print could give some support to US yields and the dollar and weigh on equities – but the market’s tilt suggests bad news will likely move markets more than good news.

In FX: the US dollar may have spent the week under pressure, but EURUSD will likely end the week without having successfully cleared the 1.18 resistance, suggesting that the shutdown and dovish Fed bets are fully priced in, and a fresh catalyst will be needed for the pair to reach the 1.20 mark. The same is true for sterling: Cable is back below 1.35 and remains unappealing due to budget pressures. The UK 10-year gilt yield is not only near Liz Truss “mini-budget” crisis levels but is also diverging undesirably from the US 10-year yield. That’s a drag on sterling, as higher yields narrow fiscal headroom, raise the chance of further tax hikes or spending cuts, and lower UK growth expectations.

Elsewhere in commodities, gold consolidates near its ATH while US crude broke below the $62pb support, snapping a floor that had held since August, on expectations of more OPEC supply. Trend and momentum indicators remain comfortably negative, and the RSI is not yet flashing oversold conditions – meaning bears may be tempted to test the $60pb level. That should act as solid support.