Market Rises Despite Shutdown; Berkshire Buys OxyChem for $9.7B

Treasury Secretary Scott Bessent struck a cautious tone on Day 2 of the government shutdown, warning investors that “we could see a hit to the GDP, a hit to growth and a hit to working America.” This warning came despite recent economic strength, with GDP having risen at a 3.8% annual rate in the second quarter. The Federal Reserve’s recent interest rate cuts have created additional economic momentum that could potentially accelerate growth further, raising inflation concerns in the process.

Market participants appeared to view the situation differently, with some analysts suggesting that a modest economic slowdown might not be entirely unwelcome given the current growth trajectory. This perspective seemed to drive investor behavior, as the Vanguard S&P 500 ETF (VOO) rose 0.4% on the shutdown’s first day and gained another 0.3% in premarket trading on Day 2. The disconnect between official warnings and market performance highlighted the complex calculus investors must navigate during political uncertainty.

In the day’s most significant corporate development, Berkshire Hathaway announced it would acquire Occidental Petroleum’s OxyChem petrochemical division for $9.7 billion in cash. The massive transaction represents a substantial vote of confidence in the energy sector from one of the world’s most respected investment firms. The deal immediately impacted both companies’ stock prices, with Occidental Petroleum shares rising 1% in premarket trading while Berkshire Hathaway stock declined 1.1%.

The acquisition marks another strategic move by Berkshire Hathaway in the energy space, building on its existing position in Occidental Petroleum. The $9.7 billion cash purchase of OxyChem demonstrates Berkshire’s continued appetite for essential industrial assets with strong cash flow characteristics, even as broader market attention remained focused on the government shutdown. The transaction represents one of the largest energy sector deals of the year and signals confidence in the long-term prospects of petrochemical assets.

Medical device-maker Angiodynamics delivered positive earnings news, beating estimates by two cents with a $0.10 per share loss for its fiscal first quarter of 2026. The company reported sales of $75.7 million, which also exceeded expectations. More importantly, Angiodynamics provided encouraging guidance, forecasting smaller losses than expected for the full year—between $0.23 and $0.33 per share—on stronger-than-anticipated sales of $308 million to $313 million.

Analyst activity featured significant upgrades and downgrades across major companies. KeyBanc analyst Ashley Owens upgraded Nike to overweight with a $90 price target following the company’s successful earnings report. Despite acknowledging “near term choppiness … from tariffs, digital, and China,” Owens expressed confidence in Nike’s positioning “for a return to sustainable growth/margin recovery.” Conversely, Roth/MKM analyst Eric Handler downgraded Electronic Arts to neutral with a $210 price target after the gaming company agreed to be taken private in a $55 billion deal.