The New York Stock Exchange closed higher on Monday, except for the Dow Jones, buoyed by a wave of announcements from OpenAI that rekindled enthusiasm for artificial intelligence (AI).
The tech-heavy Nasdaq rose 0.71% to 22,941.67 points, while the broader S&P 500 gained 0.36% to end on 6,740.28 points, with both hitting new record highs. The Dow Jones, however, dipped by 0.14%.
“Optimism around AI is a key driver of the market’s current momentum,” said Sam Stovall of investment analysis company CFRA.
AI deal expected to generate over $100 billion
OpenAI announced a massive order of semiconductor chips from Advanced Micro Devices (AMD), in which it will become a minority shareholder.
AMD’s CEO, Lisa Su, revealed that the agreement has the potential to generate income exceeding $100 billion over the coming years.
The company has committed to delivering millions of Graphics Processing Units (GPUs) to OpenAI, crucial for advancing AI technologies.
AMD’s stock soared, rising over 37% in early Wall Street trading, and remained strong, gaining a gain of around 26% to reach $207.58 by 14:05 GMT.
Investors awaiting corporate earnings reports
“This announcement breathes new life into the tech sector, which some feared might be losing steam,” added Stovall.
Tech giants have driven the US market in recent years, fuelled largely by the AI race, which has attracted investments worth tens or even hundreds of billions of dollars.
However, profitability in the sector remains a distant prospect, with most players focusing on long-term growth rather than short-term returns.
In a quiet period for major economic data, “emotions are also influencing market movements, particularly fear of missing out on opportunities,” noted Stovall. Investors are now awaiting the release of corporate earnings reports.
These developments have overshadowed the six-day public service shutdown in the US. Senators were set to vote in the afternoon, as former President Trump threatened drastic measures, including mass layoffs of federal employees, if no agreement was reached, according to Jose Torres of Interactive Brokers.
New $250-billion megabank
On the bond market, the yield on 10-year US Treasury notes rose significantly to 4.16% by 20:30 GMT, up from 4.12% at Friday’s close.
Among individual companies, design platform Figma surged 7.39% to $56.96 following the announcement of a new ChatGPT feature by OpenAI, enabling interaction with select applications.
Travel booking platform Expedia also benefited, rising 2.10% to $223.83.
Meanwhile, AppLovin, a service provider for app creators, plummeted 14.03% to $587.00 after reports suggested it was under investigation by the US Securities and Exchange Commission (SEC) over its data collection policies.
Regional bank Comerica jumped 13.68% to $80.20 after news of its acquisition by Fifth Third Bancorp, which fell 1.40% to $43.79.
That merger will create a major player among the top ten US banks with about $280 billion in assets.
