U.S. stock markets achieved significant gains on Thursday, buoyed by a surge in interest surrounding artificial intelligence, particularly following OpenAI’s recent valuation spike to $500 billion. This fervor for AI technology propelled tech stocks, contributing to record highs for all three major indices. The Nasdaq Composite climbed 0.4%, the S&P 500 edged up 0.1%, and the Dow Jones Industrial Average rose 0.2%, marking a noteworthy performance amid ongoing concerns about a potential extended government shutdown in Washington.
Following the S&P 500’s historic close above 6,700 the previous day, momentum continued to build on a wave of favorable news from the AI sector. Semiconductor stocks saw pronounced increases globally; Nvidia reached an all-time high, while Advanced Micro Devices (AMD) and SK Hynix also reported gains. OpenAI’s impressive valuation growth, which dethroned SpaceX as the largest startup, fuels investor optimism, despite persistent fears regarding a potential AI market bubble.
While the impending government shutdown seems set to extend through at least the end of the week, markets have remained largely unfazed. President Trump has ramped up confrontational rhetoric towards Democrats, threatening significant staff cuts across federal agencies and indicating plans to halt federal funding to Democratic-led states. Trump’s upcoming discussion with Office of Management and Budget Director Russ Vought aims to address possible cuts to what he termed “Democrat Agencies.” However, the anticipated release of the September jobs report will likely be delayed due to the shutdown, prompting Wall Street to seek guidance from private sector data.
A report from Challenger, Gray & Christmas highlighted a decline in hiring plans to their lowest levels since 2009, suggesting a softening labor market amid the ongoing federal data blackout. This has reinforced prevailing investor sentiment favoring an interest rate cut by the Federal Reserve during their upcoming meeting, especially given earlier indicators of cracks in the labor market.
Notwithstanding broader market gains, Tesla stock faced pressure despite reporting a record quarter of sales, as investors turned their attention to future performance prospects minus the federal electric vehicle tax credit expected to expire soon.
The excitement surrounding OpenAI’s soaring valuation also helped energize the cryptocurrency markets. Bitcoin surged beyond $120,000, reflecting a rally across digital assets and extending a strong performance for the year.
In commodities, gold took a momentary pause in its upward trajectory after enjoying a record rally this year, while oil prices continued to decline, amidst concerns about oversupply. The backdrop of potential output increases by OPEC+ has added to market instability in the oil sector.
Publicly traded firms also made headlines. Fair Isaac (FICO) stock climbed nearly 19% on news that it will sell its score services directly to lenders, disrupting traditional credit bureau business models. Meanwhile, Berkshire Hathaway announced a major acquisition of Occidental Petroleum’s chemical division for $9.7 billion, marking a significant move for Warren Buffett’s investment conglomerate.
Overall, the day’s activities reflect a complex landscape where AI-driven enthusiasm propelled stock market heights while uncertainties linger in the geopolitical and economic climate.
