Wall Street experienced a mixed day on Monday, with gains from major artificial intelligence (AI) companies buoying the market despite weaknesses in other sectors. The S&P 500 increased by 0.2%, inching closer to its all-time high set just a week earlier, while the Dow Jones Industrial Average fell by 226 points, or 0.5%. The Nasdaq composite, on the other hand, saw a rise of 0.5%.
Nvidia led the charge, increasing by 2.2% and continuing its stellar performance this year with a total gain of 54.1%. Amazon followed closely, jumping 4% after announcing a significant $38 billion partnership with OpenAI for cloud computing services tailored to AI workloads, contributing to positive sentiment around tech stocks.
Meanwhile, IREN, an AI cloud service company, surged by 11.5% following Microsoft’s announcement of a $9.7 billion contract that grants access to Nvidia’s chips. Palantir Technologies, also heavily invested in AI, saw its shares climb by 3.3% as investors anticipated favorable results in its upcoming quarterly earnings report.
Despite these successes, concerns are mounting that the overall U.S. stock market, especially AI-related stocks, may be overvalued and could face a potential correction reminiscent of the dot-com bubble in 2000. Nevertheless, the majority of companies are currently meeting or exceeding profit expectations. According to FactSet, four out of five S&P 500 companies have surpassed analysts’ forecasts during this earnings season, with healthy growth anticipated.
On the downside, Kimberly-Clark saw a steep decline of 14.6% after announcing plans to acquire Kenvue for $48.7 billion, while Kenvue’s stock rose by 12.3% following the news. Beyond Meat also faced challenges, dropping 16% after postponing its quarterly earnings report to Nov. 11, citing the need for additional time to evaluate financial impacts from earlier disclosed asset issues.
All in all, the S&P 500 closed at 6,851.97, gaining 11.77 points. The Dow Jones Industrial Average dropped 226.19 points to settle at 47,336.68, and the Nasdaq composite rose 109.77 points to 23,834.72. The bond market saw the yield on the 10-year Treasury slightly decline to 4.10% from 4.11%.
A report from the Institute for Supply Management indicated a worrying decline in U.S. manufacturing activity, with manufacturers citing financial difficulties stemming from tariff impacts on their businesses. Comments from industry participants reflected a sentiment of concern over future growth, further emphasizing the economic pressures present.
Markets overseas showcased a more mixed performance, with European indexes displaying varied results following a positive finish in Asia. South Korea’s Kospi index recorded a notable surge of 2.8%, supported by SK Hynix’s nearly 11% increase, attributed to collaborations with Nvidia to enhance AI capabilities in the country. Additionally, improvements for South Korean shipbuilders emerged after China alleviated port fees on U.S. investments, further contributing to positive market conditions.
As economic factors unfold, the resilience of leading tech companies brings a sense of optimism amid broader uncertainties, showcasing the dynamic nature of the current market landscape.