AI remained heavily in focus this week, though upbeat sentiment wavered, systems were overshadowed by valuation concerns. The major indexes recovered briefly, with the Nasdaq Composite (IXIC) surging back near record high territory as Big Tech earnings flooded Wall Street. These gains didn't last long, however, with shares struggling against a grim AI outlook by midweek.
Private sector jobs data that surprised with a significant month-on-month increase for October send all three indexes higher Wednesday, with the Dow Jones Industrial Average (DJI) up triple digits. Despite the several moves into the black, each of the major indexes is headed for their first weekly drop in four, as Thursday ushered in a new fold of tech and AI selling. Consumer sentiment from the University of Michigan also struck a nerve, as the reading hit a record low midday Friday.
Big Tech Earnings Takeover
Palantir Technologies (PLTR) pushed aside its earnings beat on valuation concerns, while a grim robotaxi outlook dragged Uber Technologies (UBER) after its quarterly report. Meanwhile, a top-line beat from Unity Software (U) took the stock to the top of the New York Stock Exchange (NYSE), while behemoth Advanced Micro Devices (AMD) saw more options attention after brushing off its Q3 beat.
Datadog (DDOG) looked to dodge the tech sector selloff, while software name Applovin (APP) shared a third-quarter beat and hiked its current-quarter outlook. Snapchat parent Snap (SNAP) logged its best day since April, just as cloud newbie CoreWeave (CRWV) prepped for its third report since going public.
Major Deals Penned This Week
Starting the week strong with some new support was IREN (IREN), after signing a five-year, $9.7 billion cloud infrastructure deal with Microsoft (MSFT). Amazon.com (AMZN) is also writing up contracts, as crypto miner Cipher Mining (CIFR) landed a 15-year lease and AI workload agreement with the tech mogul. Also creating noise was Kimberly-Clark's (KMB) new acquisition of Johnson & Johnson (JNJ) spinoff Kenvue (KVUE), worth $48.7 billion.
How the Shutdown is Impacting Economic Data
November has been off to a busy start with big name earnings flooding the confessionals. The government shutdown that began Oct. 1 has now become the longest ever, bringing continued disruptions to economic data. With this in mind, key inflation data is expected next week, as well as commentary from several Federal Reserve officials. For earnings, we will see reports from Applied Materials (AMAT), Cisco Systems (CSCO), CoreWeave (CRWV), JD.com (JD), Rigetti Computing (RGTI), Walt Disney (DIS), and more.
Don't forget to check out Schaeffer's Senior V.P. of Research Todd Salamone's take on what to expect from the S&P 500 when it trades in a bullish channel. Also of note, follow Quantitative Analyst Rocky White's investigation on whether or not initial public offerings (IPO) are worth the hype.
