S&P 500, Nasdaq Extend Records on AI Surge
The S&P 500 and Nasdaq 100 achieved new record levels on Monday, increasing by 0.4% and 0.8% respectively. This growth was largely driven by dealmaking within the AI sector, enhancing investor confidence even as the US government shutdown entered its second week. In contrast, the Dow Jones Industrial Average decreased by 65 points due to declines in Home Depot and Verizon stocks. Advanced Micro Devices (AMD) saw a significant increase of 23.7% after announcing a multi-year agreement to supply AI chips to OpenAI, which includes an option for OpenAI to potentially purchase up to 10% of AMD. This development has sparked optimism regarding broader mergers and acquisitions activity. Comerica’s shares rose by 13.7% following the announcement of its $10.9 billion all-stock acquisition agreement with Fifth Third Bancorp. Investors appeared to largely disregard the ongoing government shutdown, which has led to delays in important economic data such as the employment report. Instead, they are focusing on strong earnings potential and the possibility of interest rate reductions by the Federal Reserve. Among mega-cap stocks, Microsoft, Tesla, and Alphabet saw gains of 2.2%, 5.4%, and 2%, respectively, while Nvidia experienced a decline of 1.1%.
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