Wall Street saw gains on Monday, driven by powerhouse companies in the artificial intelligence (AI) sector like Nvidia and Amazon. The S&P 500 edged up 0.2%, inching closer to its all-time high set just last week, despite a majority of stocks in the index experiencing losses. The Dow Jones Industrial Average dipped 0.5%, while the Nasdaq composite surged 0.5%.
Nvidia continued to lead the charge in lifting the S&P 500, with a 2.2% increase pushing its year-to-date gain to an impressive 54.1%. Amazon followed closely behind, jumping 4% after announcing a $38 billion deal with OpenAI to utilize Amazon’s cloud computing services for its AI workloads.
Another AI player making waves was IREN, an AI cloud service provider, which soared 11.5% after Microsoft revealed a $9.7 billion contract with the company, granting the tech giant access to Nvidia’s chips. Palantir Technologies, with a remarkable 165% gain for the year so far, rose by 3.3% ahead of its quarterly earnings report.
While AI stocks have been driving the market higher, concerns have been raised about their valuations potentially leading to a bubble akin to the dot-com bust in 2000. Companies across the U.S. stock market are under pressure to deliver strong profit growth to justify their soaring stock prices.
Despite these concerns, the majority of companies have been exceeding analysts’ profit forecasts. FactSet reported that four out of five companies in the S&P 500 have surpassed expectations this reporting season, with overall healthy growth of nearly 11% compared to the previous year.
On the downside, Kimberly-Clark saw a sharp 14.6% drop after announcing its acquisition of Kenvue for $48.7 billion, causing Kenvue’s stock to soar by 12.3%. Beyond Meat also tumbled 16% as it delayed its quarterly earnings report to assess potential non-cash charges related to its assets.
In international markets, European indexes were mixed following a strong finish in Asia. South Korea’s Kospi reached a new record high, with SK Hynix surging nearly 11% after partnering with Nvidia to enhance the country’s AI infrastructure. South Korean shipbuilders also saw gains after China announced the cancellation of added port fees on U.S.-invested or U.S.-flagged vessels following a meeting between Trump and Xi Jinping.
Overall, the stock market continues to be influenced by the performance of AI companies, highlighting the importance of delivering strong financial results to sustain the current market momentum.
