Wall Street closed higher on Tuesday, driven by healthcare stocks. Investors continued to overlook concerns about an imminent government shutdown and largely ignored economic data from the consumer sector. All three benchmark indexes finished in the green.
The Dow Jones Industrial Average (DJI) climbed 0.2%, or 81.82 points, to close at 46,397.89. Twenty components of the 30-stock index ended in positive territory, while 10 ended in negative. This was a record close for the index.
The tech-heavy Nasdaq Composite added 68.86 points, or 0.3%, to close at 22,660.01.
The S&P 500 gained 27.25 points, or 0.4%, to close at 6,688.46. Seven of the 11 broad sectors of the benchmark index closed in the green. The Health Care Select Sector SPDR (XLV), the Industrials Select Sector SPDR (XLI) and the Technology Select Sector SPDR (XLK) advanced 2.4%, 0.8% and 0.6%, respectively, while the Energy Select Sector SPDR (XLE) fell 1.1%.
The fear gauge CBOE Volatility Index (VIX) increased 1% to 16.28. A total of 18.56 billion shares were traded on Tuesday, higher than the last 20-session average of 18.38 billion. Advancers outnumbered decliners by a 1.27-to-1 ratio on the NYSE, while declining issues led advancing ones by 1.02-to-1 on the Nasdaq.
Wall Street managed to notch gains on Tuesday even as investors kept a close eye on Washington, where the threat of a federal government shutdown loomed large. The potential lapse in funding, which would disrupt non-essential government operations, has stirred unease among market participants, raising questions about the broader economic and financial impact if lawmakers fail to reach an agreement. A prolonged shutdown could dent consumer confidence, slow government spending and temporarily weigh on GDP, though markets have historically recovered quickly once funding is restored.
Despite these worries, stocks rallied as investors looked beyond short-term political wrangling. Many traders appeared to bet that even if a shutdown materializes, its economic consequences would likely be limited compared to other headwinds, such as inflationary pressures and the Fed’s rate path. Previous shutdowns have caused disruptions, but markets often view them as political theater rather than a systemic threat.
The health care sector advanced on Tuesday as investors sought defensive positioning amid uncertainty over a potential government shutdown. Health care stocks are often viewed as safer bets during periods of political and economic instability, given the sector’s stable demand and resilience against cyclical downturns. In addition, optimism around pharmaceutical and biotech companies helped lift sentiment, with several firms benefiting from positive trial updates and regulatory developments.
