S&P 500, Nasdaq end higher on Amazon-OpenAI deal; Fed path forward grows murky
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Traders working on the floor of the New York Stock Exchange, in New York City.
PHOTO: AFP
Follow topic:
- S&P 500 and Nasdaq rose, driven by AI deals like Amazon's US$38 billion agreement with OpenAI.
- Dow declined due to losses in healthcare, while uncertainty around Fed policy increased due to data scarcity.
- Trade news and dovish comments influenced the market, but semiconductor tech dominates, with tariffs being challenged.
AI generated
NEW YORK - The S&P 500 and the Nasdaq closed higher on Nov 3, with artificial intelligence-related deals driving much of the gains even as the Federal Reserve’s near-term monetary policy grew increasingly foggy due to scarcity of official US economic data.
Tech and tech-related firms helped boost the Nasdaq to the biggest gain, while healthcare companies UnitedHealth Group and Merck held the Dow in negative territory.
Among the major drivers to the upside, Amazon.com jumped after the company announced it struck a US$38 billion (S$50 billion) deal with OpenAI
Nvidia shares gained after US President Donald Trump said the AI chipmaker’s most advanced microchips will be reserved for US companies and kept out of China and other countries.
Over the weekend, the White House released details about the agreement reached by US President Donald Trump and Chinese President Xi Jinping to de-escalate the trade war between the world’s two biggest economies.
“The Amazon deal and other M&A news have boosted the market, and then you know we came into the week after getting marginally positive news over the weekend, both about the China trade situation and some dovish Fedspeak,” said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky. “(But) it’s definitively a market led by big tech semiconductors and it has been for almost this entire bull market.”
Kimberly-Clark shares slid after it was revealed the consumer goods company will buy Tylenol maker Kenvue for more than US$40 billion.
While official economic data remains scarce amid the ongoing government shutdown, the Institute for Supply Management and S&P Global released their purchasing managers’ indexes, which showed US factories continue to grapple with uncertainty stemming from Mr Trump’s tariff policies.
The US Supreme Court is expected to hear arguments pertaining to the legality of Mr Trump’s tariffs on Nov 5.
In the wake of last week’s expected interest rate cut, the Fed’s next move has become increasingly unclear given the lack of economic indicators due to the ongoing government shutdown.
Payrolls processor ADP’s National Employment index, expected on Nov 5, could shed light on the state of the US labour market.
Fed officials offered conflicting viewpoints, with Fed governor Stephen Miran making the case for additional rate cuts, but Chicago Fed president Austan Goolsbee said he was leery of additional cuts while inflation remains well above the central bank’s 2 per cent annual target.
According to preliminary data, the S&P 500 gained 12.52 points, or 0.18 per cent, to end at 6,852.72 points, while the Nasdaq Composite gained 109.77 points, or 0.46 per cent, to 23,834.72. The Dow Jones Industrial Average fell 218.88 points, or 0.46 per cent, to 47,343.99.
Third-quarter earnings season is well under way, with well over 300 of the companies in the S&P 500 having reported. Of those, 83 per cent have beaten analysts’ estimates, according to the most recent LSEG data. REUTERS
