Wall Street indices closed higher, with both the S&P 500 and Nasdaq rising, supported by major deals in the artificial intelligence sector. This came despite growing uncertainty over the Federal Reserve’s monetary policy path amid a lack of official economic data due to the U.S. government shutdown.
Technology and related companies contributed to the market’s gains, while declines in healthcare stocks such as UnitedHealth and Merck limited the Dow Jones Industrial Average’s performance, which ended the session in negative territory.
Among the key drivers of the markets was Amazon’s announcement of a $38 billion deal with OpenAI to operate and expand the AI developer’s ChatGPT capabilities on Amazon Web Services’ cloud infrastructure, pushing Amazon shares up 4%. Nvidia shares also climbed 2.2% after U.S. President Donald Trump announced that the company’s advanced chips would be reserved for domestic use and not exported to China or other countries.
The gains were further supported by a relatively optimistic atmosphere following the White House’s announcement of details of an agreement between Trump and Chinese President Xi Jinping to ease trade tensions between the world’s two largest economies. Analysts said that the positive news surrounding Amazon’s deal, combined with progress in trade détente and dovish remarks from some Federal Reserve officials, helped lift sentiment even though the market remains primarily driven by the technology and semiconductor sectors.
Conversely, Kimberly Clark shares plunged 14.6% after it announced plans to acquire Kenvue, the maker of Tylenol, in a deal exceeding $40 billion, while Kenvue shares jumped 12.3%.
With official government data unavailable due to the shutdown, PMI surveys from the Institute for Supply Management and S&P Global indicated ongoing uncertainty in U.S. manufacturing performance amid Trump’s tariff policies. The U.S. Supreme Court is expected to review the legality of these tariffs.
On the monetary policy front, uncertainty increased regarding the Federal Reserve’s next move after its recent interest rate cut, as officials remain divided between calls for further easing to support growth and warnings of risks given inflation’s persistence above the 2% target.
At the close of trading, the Dow Jones Industrial Average fell 0.48%, while the S&P 500 rose 0.17%, and the Nasdaq Composite gained 0.46%. The consumer discretionary sector recorded the biggest gains among the S&P 500’s eleven sectors, while the materials sector posted the largest decline.
As the third quarter earnings season continues, more than 300 companies in the index have beaten analysts’ forecasts, with 83% surpassing estimates, according to the latest LSEG data. Despite gains in some stocks, decliners outnumbered advancers on both the New York Stock Exchange and Nasdaq, reflecting ongoing volatility and caution in the U.S. market.
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