On Thursday, U.S. stock markets experienced a notable upswing, largely fueled by excitement surrounding advancements in artificial intelligence (AI). This bullish sentiment was further highlighted by the significant increase in the valuation of OpenAI, which surged to $500 billion following an employee stock sale. This development has positioned OpenAI ahead of SpaceX, co-founded by Elon Musk, as the world’s most valuable startup.
The tech-centric Nasdaq Composite rose by 0.4%, while the S&P 500 and Dow Jones Industrial Average also contributed to the positive momentum, recording gains of 0.1% and 0.2% respectively. This rally marked a notable achievement for all three indices, culminating in new record highs. Notably, the S&P 500 managed to close above the 6,700 mark for the first time the previous day, reflecting robust investor confidence.
The rally was bolstered by favorable news from the AI sector, particularly benefiting chip manufacturers. Nvidia stocks hit an all-time high, alongside significant gains in shares of Advanced Micro Devices (AMD) and SK Hynix. Investors are increasingly optimistic about the demand for AI chips, alleviating previous concerns about an overinflated market.
Despite ongoing fears of a looming U.S. government shutdown, which could potentially extend through the week, market reactions have remained relatively muted. Tensions escalated as President Trump intensified his critique of Democratic legislators, threatening widespread federal job cuts and seeking to halt funding to Democratic-led states. Trump is scheduled to meet with White House Office of Management and Budget Director Russ Vought to strategize cost-cutting measures within federal agencies.
The anticipated release of the September jobs report on Friday is likely to be delayed due to the government impasse. This development adds pressure on Wall Street, as many look for insights into the labor market ahead of the Federal Reserve’s next interest rate decision. Preliminary data from Challenger, Gray & Christmas revealed that September’s hiring plans were at their lowest level since 2009, indicating a slowdown in workforce expansion. Investors are largely betting on the Fed implementing a rate cut during its upcoming meeting, considering the emerging signs of a “low hire, low fire” labor market.
In contrast, shares of Tesla faced a downturn despite announcing a record number of vehicle deliveries in the third quarter. Investor concerns about future performance regarding the absence of federal electric vehicle tax credits have contributed to this decline.
Amidst these developments, Bitcoin surged above $120,000 as momentum grew in the cryptocurrency market, indicative of increased investor interest and activity. The outlook for Bitcoin remains optimistic as October is historically a strong month for the cryptocurrency.
While gold prices have seen substantial gains, Thursday brought a slight pullback after a significant rally over the year. Experts anticipate gold prices could soar to $4,000 an ounce in the coming months, demonstrating the ongoing allure of the precious metal amid economic uncertainties.
Oil prices also saw declines owing to oversupply fears, marking a fourth consecutive day of downturns. The ongoing discussions among OPEC+ countries about potential output increases have added to market volatility.
In corporate news, FICO stocks surged after the company began offering its credit scores directly to mortgage lenders, bypassing traditional credit bureaus, which saw their shares decline.
Overall, the market’s focus remains tightly aligned with technological advancements in AI, fluctuating commodity prices, and the evolving political landscape in Washington.
