Wall Street traders left stocks near record highs amid speculation that artificial intelligence and Federal Reserve rate cuts will keep driving corporate earnings. A slide in gold deepened. Bonds fell.
Following a three-day rally in the S&P 500, the gauge was little changed. While most major groups took a breather after the advance, the cohort of tech megacaps kept powering ahead. Microsoft Corp. gained 3% after finalizing a new agreement in a long-negotiated partnership with and OpenAI. Under the new pact, the software giant will get a 27% ownership stake worth about $135 billion. Apple Inc. topped $4 trillion.
That’s added to optimism about the industry ahead of results from the two tech giants and three other megacaps this week — Alphabet Inc., Meta Platforms Inc. and Amazon.com Inc.
“This group has repeatedly reassured investors that the AI theme is alive and well, and given the number of deals that have been announced over the past few months, it seems likely that this narrative will continue so long as Wall Street rewards them for this approach,” said Bret Kenwell at eToro.
Aside from earnings, policymakers in Washington will take the spotlight, with a widely anticipated quarter-point reduction from the Fed on Wednesday. Trade headlines also remain in focus, with President Donald Trump’s Thursday sit-down with Chinese President Xi Jinping watched most closely.
“The stock market is getting everything it wants, from a Federal Reserve rate cut to a thawing of US-China trade tensions to continued strength in earnings,” said Paul Stanley at Granite Bay Wealth Management. “While the market’s past few days of gains might be perplexing to some investors, there is justification for this latest melt up in stocks.”
The S&P 500 hovered near 6,875. A gauge of the “Magnificent Seven” megacaps climbed almost 1%, extending a surge from the launch of start of the AI mania in November 2022 to 280%.
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