[New York Stock Exchange] Tech Stocks Rally on AI Optimism, Market Closes Mixed... Nasdaq Up 0.46%

OpenAI Signs $38 Billion Computing Deal with Amazon
U.S. Government Approves Nvidia Chip Exports to UAE via Microsoft
Amazon Up 4%, Nvidia Up 2%... Tech Stocks Lead Market Gains
Non-Tech Stocks Show Weak Performance
Focus on Earnings Announcem

The three major indices on the New York Stock Exchange closed mixed on November 4 (local time). Technology stocks showed strength as news continued to emerge about artificial intelligence (AI)-related deals, including Amazon signing a large-scale cloud computing contract with OpenAI, the developer of ChatGPT. In contrast, most stocks outside the technology sector showed a sluggish trend.

On the 30th of last month (local time), traders were conducting their work on the trading floor of the New York Stock Exchange (NYSE) in the United States. Photo by AFP

On this day, the Dow Jones Industrial Average, which focuses on blue-chip stocks, closed at 47,336.68, down 226.19 points (0.48%) from the previous trading day. The S&P 500 Index, which tracks large-cap stocks, rose by 11.77 points (0.17%) to 6,851.97, while the technology-heavy Nasdaq Index climbed 109.766 points (0.46%) to finish at 23,834.723.

By sector, technology stocks surged significantly. Amazon jumped 4% after signing a $38 billion contract with OpenAI. With this deal, OpenAI will immediately use Amazon Web Services (AWS) data centers, and Amazon will build additional infrastructure for OpenAI in the future. It is reported that this partnership will involve the use of hundreds of thousands of Nvidia graphics processing units (GPUs). Nvidia also rose 2.17% following news that the Donald Trump administration approved Microsoft’s export of Nvidia semiconductors to the United Arab Emirates (UAE). Shares of Iron, a data center company, soared 11.54% after it was announced that it had signed a $9.7 billion contract with Microsoft. Semiconductor stocks also rose in tandem, with Micron up 4.88% and AMD up 1.38%.

While momentum for AI-related deals continues, the temporary trade agreement reached between the United States and China at the summit on October 30 also helped ease market anxiety.

Gil Luria, Head of Technology Research at DA Davidson, analyzed, "The market is rewarding key AI players such as Nvidia, Microsoft, Google, Amazon, and Palantir today. These companies are leading the AI sector and monopolizing nearly all of its value. They are securing infrastructure to provide services to customers and are also experiencing a positive inflection point in terms of demand."

Ulrike Hoffmann-Burchardi, Chief Investment Officer (CIO) for the United States at UBS Global Wealth Management, advised, "Even though the stock market has risen sharply this year, there is still room for the bull market to continue. Investors should position themselves to benefit from this upward trend."

However, stocks outside the technology sector generally showed weakness. More than 300 companies in the S&P 500 declined, and gains were concentrated among the large technology stocks known as the "Magnificent 7 (M7)." Even last month, more S&P 500 companies saw declines than gains in returns.

Investors are also paying attention to the remaining earnings announcements. According to financial data provider FactSet, more than 300 S&P 500-listed companies have released their third-quarter results so far this year, and over 80% of them have exceeded market expectations. This week, more than 100 companies, including Palantir and AMD, are scheduled to announce their earnings.

Tom Lee, Head of Research at Fundstrat, diagnosed, "The earnings outlook for U.S. companies is fundamentally solid. 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 the end of quantitative tightening."

Additionally, November is seasonally a period of strong market performance. According to investment information firm Stock Traders Almanac, the S&P 500 Index has risen by an average of 1.8% in November.

U.S. Treasury yields remained steady. The 10-year U.S. Treasury yield, a global bond benchmark, 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.