Market momentum breaks: S&P 500 drops below 50-day average for first time since April – what does it mean?

Market Overview - The S&P 500 fell below its 50-day moving average for the first time since April, indicating investor concerns over the U.S. government shutdown and weak economic data [1][11] - The Nasdaq Composite closed down 3% for the week, marking its worst performance since early April, while the S&P 500 and Dow each lost over 1% [8] Economic Indicators - A University of Michigan survey indicated consumer sentiment is nearing its lowest level ever, and October layoffs reached a 22-year high according to Challenger, Gray & Christmas [3] - Economists anticipated a loss of 60,000 jobs and an increase in unemployment to 4.5%, but the Bureau of Labor Statistics was unable to release the nonfarm payroll report due to the government shutdown [4] Government Shutdown Impact - Senate Minority Leader Chuck Schumer proposed a plan to end the government shutdown by providing short-term funding in exchange for a one-year extension of enhanced ACA tax credits [3] - The shutdown has led to significant disruptions, including a 10% cut in flights at 40 major airports, affecting 3,500 to 4,000 flights daily [5] AI and Tech Stocks Performance - Major AI stocks such as Oracle, AMD, and Nvidia experienced significant declines, contributing to the overall market downturn due to concerns over high valuations and slowing demand [8][12] - Oracle dropped nearly 2% on Friday, resulting in a weekly loss of 9%, while AMD fell almost 9% [8] Investor Behavior - Some investors are shifting towards value stocks amidst the sell-off in tech and AI stocks, with the sentiment that AI spending remains robust [9] - Leah Bennett, Chief Investment Strategist at Concurrent Asset Management, expressed optimism that the AI rally will continue despite current market challenges [9]