Major stock indexes edged up Thursday in quiet trading to set new record closing highs again as investors remained unfazed by the government shutdown. The Dow Jones industrial average firmed 0.2 percent, the S&P 500 rose 0.1 percent, and the Nasdaq was up 0.4 percent. US Treasury yields were flat, the dollar rose, and oil prices slipped.

Activity has been limited by the absence of official economic reports with the shutdown of the government this week, including the jobless claims and factory orders reports that were due on Thursday. Investors have not yet considered the shutdown a major event but that could change if it lasts long and if President Trump makes good on threats to fire large numbers of federal employees. Underlying sentiment remains favorable as investors continue to focus on rate cuts ahead which they expect to keep the economy from a serious downturn.

Among sectors, the AI trade remained a big winner with Nvidia and other AI chipmakers the best plays. Other winners Thursday included airlines, restaurant chains, travel & leisure, and managed care. Lagging were telecom, big banks, energy, entertainment. Pharma fell back as it corrected some of its recent advance.

Market Reflections track market reaction to the trading day's major events. Economic data, policymaker speeches, and company news are featured in this report as well as key indexes and financial instruments.

Understanding why markets respond as they do is fundamental for an investor. Market Reflections help explain how the day's events, news, and data impact the outlook for the economy and for market prices.