U.S. Stocks Hover Near Records as Tech Rallies

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U.S. Stocks Hover Near Records as Tech Rallies/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. stocks held near record levels Monday as tech shares—led by AMD—continued to climb. The S&P 500 rose 0.3% after its latest all-time high, driven by AI-fueled optimism. Investors largely ignored the ongoing U.S. government shutdown while monitoring global political developments and Treasury yields.

FILE – Logos the New York Stock Exchange adorn trading posts, on the floor, Wednesday, March 16, 2022. Stocks are off to mixed start on Wall Street, Thursday, April 7, as several major technology stocks rose even as many other parts of the market were in the red. (AP Photo/Richard Drew, File)

Tech Rally Keeps Stocks Near Record Highs Quick Looks

S&P 500 up 0.3%, Dow Jones nearly flat, and Nasdaq up 0.4%.
AMD shares surged 32.6% after a deal with OpenAI to supply AI chips.
OpenAI could acquire up to 160 million AMD shares if milestones are met.
Nvidia dropped 1.5% amid concerns about overlapping AI investments.
Comerica jumped 16.5% after agreeing to a $10.9 billion all-stock merger with Fifth Third Bancorp.
Wall Street largely shrugged off the federal government shutdown.
Japan’s Nikkei 225 jumped 4.8% on news of Sanae Takaichi becoming LDP leader and likely prime minister.
French CAC 40 fell 1.2% after PM Sébastien Lecornu’s abrupt resignation.
10-year Treasury yield climbed to 4.16%, up from 4.13%.
Investors await Federal Reserve minutes and earnings from Delta, PepsiCo, and Levi Strauss.

Deep Look

Tech Stocks Power Wall Street Near Record Levels as AI Momentum Builds

NEW YORK — Wall Street hovered close to record highs on Monday as technology and AI-driven stocks continued to propel the market forward. The S&P 500 rose 0.3%, marking another session near all-time highs, while the Dow Jones Industrial Average added 17 points (less than 0.1%) and the Nasdaq composite advanced 0.4%.

The rally was led by Advanced Micro Devices (AMD), whose stock soared 32.6% after announcing a major partnership with OpenAI, the artificial intelligence powerhouse. Under the deal, OpenAI will use AMD’s chips to power AI infrastructure—and could gain up to 160 million shares of AMD if certain performance targets are reached.

The move cements AMD’s place as one of the biggest beneficiaries of the ongoing AI boom, which has helped push U.S. equity markets to repeated record levels this year.

“For AMD, this is a breakthrough partnership,” said one market strategist. “It highlights how AI demand continues to reshape the entire semiconductor landscape.”

AI Drives Market Growth, But Raises Bubble Concerns

The enthusiasm around AI remains a dominant force in markets, though analysts warn that valuations may be growing frothy. Over the past few weeks, OpenAI has expanded rapidly, striking partnerships worldwide to develop next-generation AI infrastructure. The company, valued at $500 billion, has become a central driver of the tech sector’s rise.

Still, some investors are questioning whether the rapid growth of AI-related deals is sustainable. Critics noted that Nvidia, another chip leader, recently announced a $100 billion investment into OpenAI—raising concerns that the tech sector’s AI push might be becoming “a closed investment loop.”

Nvidia’s shares dipped 1.5% Monday following AMD’s announcement, as investors rebalanced positions in the semiconductor space.

Bank Merger Sparks Financials Rally

Outside the tech sector, Comerica shares climbed 16.5% after Fifth Third Bancorp agreed to buy the Dallas-based bank in an all-stock deal valued at $10.9 billion. The merger will create the ninth-largest bank in the United States by assets. Fifth Third shares gained 1% following the announcement.

The deal comes amid a wave of regional banking consolidation, as smaller lenders face regulatory and capital pressures following last year’s financial volatility.

Markets Unfazed by Government Shutdown

Despite ongoing political gridlock and a federal government shutdown entering its sixth day, investors showed little concern. Historically, government shutdowns have had minimal long-term impact on financial markets.

“Wall Street has learned to look past these episodes,” said an economist at a major investment bank. “They typically don’t alter corporate earnings or consumer spending in a lasting way.”

Global Markets React to Political Shifts

While U.S. markets stayed calm, international markets saw significant movement driven by political developments:

Japan: The Nikkei 225 index jumped 4.8% after the ruling Liberal Democratic Party (LDP) selected Sanae Takaichi as its new leader—poised to become Japan’s first female prime minister.
Takaichi, a protégé of the late Shinzo Abe, is expected to pursue pro-growth and low-interest policies, boosting investor confidence.
The yen weakened against the dollar, aiding exporters such as Toyota and Sony.
“Investors clearly like what they hear from Takaichi,” said Neil Newman, strategist at Astris Advisory Japan.
France: The CAC 40 index fell 1.2% after Prime Minister Sébastien Lecornu resigned less than a day after naming his Cabinet, deepening France’s political turmoil under President Emmanuel Macron.

Bond Market and Economic Outlook

In the bond market, the 10-year Treasury yield rose modestly to 4.16% from 4.13% Friday, reflecting stable investor sentiment. With the federal shutdown delaying several government reports, market participants expect lighter economic data releases this week.

However, traders will still watch for corporate earnings from Delta Air Lines, PepsiCo, and Levi Strauss, along with the Federal Reserve’s meeting minutes, which may offer hints about future rate cuts after the Fed lowered its benchmark rate last month.