Major AI Deals and U.S. Government Semiconductor Export Approval
Microsoft Up 4.53%... Nvidia Gains 2.61%
Earnings Announcements This Week for Palantir, AMD, and Others
The three major indices on the New York Stock Exchange showed mixed movements on November 4 (local time). Technology stocks are performing strongly as news continues to emerge about artificial intelligence (AI)-related deals, such as Amazon signing a large-scale cloud computing contract with OpenAI, the developer of ChatGPT.
As of 10:55 a.m. on the New York Stock Exchange, the blue-chip Dow Jones Industrial Average was down 247.87 points (0.52%) from the previous trading day at 47,315. The S&P 500, which focuses on large-cap stocks, was up 2.29 points (0.03%) at 6,842.49, while the tech-heavy Nasdaq was up 92.974 points (0.39%) at 23,817.932.
By sector, technology stocks are on the rise. Nvidia is up 2.61% after news that the Donald Trump administration approved Microsoft’s export of Nvidia semiconductors to the United Arab Emirates (UAE). Microsoft is up 0.42%. Amazon is showing a strong gain of 4.53% after signing a $38 billion contract with OpenAI. With this agreement, OpenAI will immediately use Amazon Web Services (AWS) data centers, and in the future, Amazon will build additional infrastructure for OpenAI. This partnership is expected to utilize hundreds of thousands of Nvidia GPUs. IronNet, a data center company, is up 10.79% after news of a $9.7 billion contract with Microsoft. Semiconductor stocks are also rising, with Micron up 5.13% and AMD up 0.34%.
As momentum for AI-related deals continues, market anxiety has eased somewhat after a temporary trade agreement was reached between the United States and China at the summit between the two countries’ leaders.
Ulrike Hoffmann-Burchardi, Chief Investment Officer (CIO) of UBS Global Wealth Management in the United States, stated, "Despite the significant rise in the stock market this year, there is still room for the bull market to continue," and added, "Investors should position themselves to benefit from this upward trend."
However, stocks outside of the technology sector are generally weak. Currently, more than 400 companies in the S&P 500 are declining.
Investors are also paying attention to the remaining earnings announcements. According to financial information provider FactSet, more than 300 S&P 500 companies have released their third-quarter results for this year so far, and more than 80% have exceeded market expectations. This week, over 100 companies, including Palantir and AMD, are scheduled to announce their earnings.
Tom Lee, Head of Research at Fundstrat, commented, "The earnings outlook for U.S. companies is fundamentally solid," and explained, "Three factors are supporting the stock market: the visibility of AI spending, blockchain-based innovation in the financial sector, and the Federal Reserve’s interest rate cuts and end of quantitative tightening."
Additionally, November is seasonally a period of strong market performance. According to investment information provider Stock Trader’s Almanac, the S&P 500 index has risen an average of 1.8% in November.
U.S. Treasury yields are steady. The benchmark 10-year U.S. Treasury yield, a global bond market indicator, stands at 4.1%, while the 2-year yield, which is sensitive to monetary policy, is at 3.59%, both unchanged from the previous day.
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