Wall Street ended mostly higher, with the Nasdaq and the S&P 500 finishing in positive territory, as investors once again flocked to artificial intelligence (AI) stocks following the announcement of a spate of new deals. However, the Dow ended in the red.. However, the Dow ended in the red.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) declined 0.5% or 226.19 points to end at 47,336.68 points.
The S&P 500 gained 0.2% or 11.77 points to close at 6,851.97 points. Consumer discretionary and tech stocks were the biggest gainers.
The Technology Select Sector SPDR (XLK) gained 0.4%, while the Consumer Discretionary Select Sector SPDR (XLY) rose 0.9%. Six of the 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq jumped 0.5%, or 109.77 points, to finish at 23,834.72.
The fear gauge, CBOE Volatility Index (VIX), was down 1.55% to 17.17. Decliners outnumbered advancers on the NYSE by a 1.34-to-1 ratio. On the Nasdaq, a 1.6-to-1 ratio favored declining issues. A total of 19.62 billion shares were traded on Monday, lower than the last 20-session average of 21.11 billion.
On the Nasdaq, there were 1,799 new highs and 2,887 new lows. On the NYSE, there were 202 new highs and 142 new lows.
Tech Stocks Drive Rally
Markets started the week on a positive note, with tech stocks driving the rally, as a spate of A-related deals gave investors’ confidence a boost. Monday’s rally was led by Amazon.com, Inc. (AMZN) after the company announced that it struck a $38 billion deal with OpenAI, allowing the ChatGPT creator to operate and expand its AI workloads using Amazon Web Services’ cloud platform.
The deal will also see thousands of NVIDIA Corporation’s (NVDA) GPU chips being used in the process. Shares of Amazon gained 4%, while NVIDIA rose 2.2%. NVIDIA has a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
In another major deal on Monday, data center company IREN Limited (IREN) reached a deal worth $9.7 billion with Microsoft Corporation (MSFT), which will give the tech giant access to Nvidia GB300 GPUs. Shares of IREN surged 11.5%.
Chip stocks got a further boost on Monday after Microsoft said that it has acquired export licenses from President Donald Trump’s administration to export NVIDIA’s chips to the UAE.
Despite some major announcements from tech companies, the Dow ended in negative territory as healthcare companies weighed on the blue-chip index. Shares of UnitedHealth Group Incorporated (UNH) fell 2.3%, while Merck & Co., Inc. (MRK) ended 4.1% lower on Monday.
Investors Deprived of Economic Data
The government shutdown has entered its second month, and the stalemate is unlikely to be over anytime soon. This has left investors deprived of key economic data, making it difficult to get a clearer picture of the Federal Reserve’s near-term monetary policy.
However, the Institute for Supply Management’s (ISM) survey report on Monday showed that the manufacturing sector continued to contract. The ISM’s manufacturing PMI declined to 48.7 in October from 49.1 in the prior month, shrinking for the eighth straight month.
Investors also digested earnings reports from a fresh batch of companies, with more than 300 of the S&P 500 companies already having reported their quarterly results.
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Amazon.com, Inc. (AMZN): Free Stock Analysis Report Microsoft Corporation (MSFT): Free Stock Analysis Report UnitedHealth Group Incorporated (UNH): Free Stock Analysis Report Merck & Co., Inc. (MRK): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis Report IREN Limited (IREN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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